Russian Bitcoin Users Could Be Fined 0.5 Mln Rubles Or Jailed For 2 Years – Report

The reports of Russian lawmakers seeking to ban bitcoin use in the country have been in media circles for quite some time now. In December, the lawmakers submitted a new draft bill to the country’s legislative assembly Duma to ban digital currencies such as bitcoin.

Now a recent report from the Rossiiskaya Gazeta, press organ of the Russian government, states that the Russian Finance Ministry has proposed amendments to the Criminal Code. Under the new amendment, those who are guilty of issuing cryptocurrency would be “fined in the amount of half a million rubles, or sent to correctional work for up to two years”.

It also said that experts of the Russian Interior Ministry and financiers believe that the “use of surrogate money threatens not only the Russian economy, but also national security.”

Ivan Solovyov, Honored Lawyer of the Russian Federation, told the news source that virtual currencies are not secured by liquid assets and any state guarantees and are therefore subject to significant exchange rate fluctuations, including the volatility based on speculations.

The turnover of money substitutes has already reached 1% of GDP in Russia and Solovyov warns that if they exceed 10% of GDP, they will pose a real threat to the financial stability. He explained that the uncontrolled expansion of the actual amount of money in circulation by surrogates will cause depreciation and gradual replacement with foreign exchange currency market. As a result, the government may lose monopoly on the issuance of money and the income from this activity, he said.

Solovyov also noted the potential of virtual currencies to be used for criminal activities and added that such a situation could not fail to attract the attention of financial, regulatory and law enforcement agencies of different countries.

Coinfox reported that the information has received no confirmation from the Russian Ministries of Finance or of the Interior. It also remains unclear that whether the amendment will concern all bitcoin users or only bitcoin miners.