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Russian Lawmakers Seek Bitcoin Ban, Submit Draft Bill To Duma

In a major step that targets to ban digital currencies such as bitcoin, Russian lawmakers submitted a new draft bill to the country’s legislative assembly Duma in December, CoinDesk reported.

The move follows the Finance Ministry's release of a draft bill in early 2015 that failed to make it to the Duma. The latest proposals included in the draft, if approved, would likely see those who break the new laws behind bars.

According to the translated version of the draft received by CoinDesk from local news service Forklog, there are several clauses that would make many uses of digital currencies liable for severe "administrative penalties", which would range from 20,000 rubles to a maximum of 5 million rubles, along with confiscation of the items responsible for the violation.

The level of fine would depend on the type of violation and the status of the party responsible (individual, entrepreneur, Russian official and legal entity).

The text defines money surrogates as "objects of property rights, including those electronic, intended for usage as exchange and/or payment means issued in the Russian Federation, not considered as official payment means in the legislation of the Russian Federation".

CoinDesk makes the following observations:

  • According to a clause titled "Malevolent issuance of money surrogates", the law would penalise those who disseminate surrogate money (potentially including miners) who deal with either Russian individuals or with international customers over the Internet.
  • The section titled "Circulation of money surrogates” identifies a number of important potential areas of digital currency use. Individuals who pay for goods with money surrogates rather than an approved, government-issued currency will be subject to penalties.
  • Giving digital currency away would also not be permitted.
  • The clause "Assistance in money surrogates circulation" states that "manufacturing for distribution purposes, or release of software, sufficient and necessary for issuance of money surrogates" would result in financial penalties. Mining clients and wallet apps could, in theory, fall under this definition.
  • Acting as an exchange that trades money surrogates with fiat currencies is also not allowed, as the text states that the "purchase and sale of money surrogates for the currency of the Russian Federation or a foreign currency" is prohibited.
  • Promoting digital currencies or advertising related services in the general media and online could be subject to scrutiny, as one clause states the "intended distribution of information sufficient and necessary for issuance of money surrogates in media and information and communication networks".

However, the distribution of information at "dedicated events and in dedicated publications" would not be not deemed an administrative violation, meaning that the coverage of digital currency conferences or dedicated media within Russia would be allowed, CoinDesk noted.

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