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Russia: Fines for Bitcoin Transactions Will Be Introduced

(Oct. 7, 2014) On October 3, 2014, Ministry of Finance of the Russian Federation, as a part of a government legislative initiative, announced that it is going to submit to the State Duma (legislature) legislation that would recognize the act of engaging in Bitcoin transactions as a misdemeanor and impose fines for “transactions with a cybercurrency and creation and distribution of software used for the issuance of monetary surrogates” in an amount up to the equivalent of US$30,000. The amount of the fine will vary depending on whether the transaction was conducted by an individual, an official, or a legal entity. (Federal Law on Amendments to Selected Legal Acts of the Russian Federation, Draft [in Russian] (Oct. 3, 2014), Document ID 00/03-17205/08-14/21-14-4, Unified Web Portal for Information on Government Legislative Initiatives (last visited Oct. 6, 2014).)

If adopted, the relevant amendments will be included in the Code of Administrative Violations. Criminal responsibility for conducting Bitcoin transactions was not introduced in the finalized version of the draft legislation, even though this measure was proposed in the initial draft. (The Ministry of Finance Will Start to Fine the Russians for Using Bitcoin [in Russian], NEWSRU.COM (Oct. 3, 2014).)

It appears that this proposal implements a Ministry of Finance statement issued in August that it was working on legislation that would ban Bitcoin in Russia completely, even though the Central Bank of Russia announced earlier this year that it may adopt a regulation allowing some circulation of cybercurrencies, including Bitcoin. (Id.) In January 2014, Bitcoin was recognized by the Central Bank as a monetary surrogate. (Russians Might Be Fined for Using Bitcoin [in Russian] FINAM.INFO (Oct. 3, 2014).)