The Stack Archive

Russian Bitcoin issuers will risk seven-year prison sentence

Fri 11 Mar 2016

The Russian Ministry of Finance is planning an amendment to the criminal code to establish severe penalties for those who issue the Bitcoin cryptocurrency or other ‘money substitutes’.

According to an unnamed governmental source speaking to Interfax [Russian], those found guilty of facilitating technological currencies will go to prison for up to four years, whilst managers and directors of institutions which issue them could be imprisoned for up to seven years.

The former version of the code’s amendment set the maximum penalty for these infractions at a year of corrective labour for individuals, or two years for those participating in a group effort.

The financial penalties have also been upgraded for Bitcoin-issuers – 500,000 roubles (about £5000 or $7,200), or a sum representing up to three years’ worth of salary (or income) for an individual or organisation. Managers will face fines of 1-2.5 million roubles, or income equivalent to 2-4 years.

A court ruling banning the practical use of Bitcoin as a purchasing currency in September of 2014 was followed four months later by the blockading of Bitcoin-related sites by Russia’s media regulator Roskomnadzor. The rationale on the ban on cryptocurrencies is that they facilitate money-laundering and other forms of digital and ‘real world’ criminal activity.

The country’s Prosecutor General set the tone for the blocks and legislations in a statement issued in early 2014. “The monitoring of the use of virtual currencies shows an increasing interest in them, including for the purpose of money laundering, profit obtained through illegal means… Russia’s official currency is the ruble. The introduction of other types of currencies and the issue of money surrogates are banned.”

Money substitutes within Russia are banned under Article 27 [Russian] of federal law.

The owning of bitcoins is not in itself illegal, and there is still a great deal of trading that can be done within Russia in bitcoins, but effectively it is the liquidation of those assets – their conversion into anything other than abstract digital entities – that is attracting the new and severe legal penalties.

Tags:

Asia cryptocurrency government legal news Russia
Send us a correction about this article Send us a news tip

Do NOT follow this link or you will be banned from the site!