Using Crypto to Avoid Sanctions
The Blockchain Association has been lobbying US senators against two legislation to prevent Russian oligarchs from utilizing cryptocurrencies to avoid sanctions placed on them following Russia’s invasion of Ukraine. The first is the “Russian Digital Asset Sanctions Compliance Act of 2022,” a House bill. The laws allow the Biden administration to restrict US cryptocurrency exchanges from accepting Russian funds. They would also allow US authorities to sanction overseas exchanges that facilitate transactions involving sanctioned Russian individuals or entities.
A Blockchain Association spokesperson, Curtis Kincaid, noted that the organization attempts to persuade lawmakers to separate fact from fiction regarding Russia’s incapacity to transfer substantial sums of money via crypto transactions to circumvent sanctions.
Regulating Crypto Mining
On Friday, the draft of the new federal law “On Mining in the Russian Federation” was submitted to the Duma. The bill intends to lift the crypto-related business out of Russia’s “grey” economy; a country rich in energy resources and with ideal mining circumstances.
The bill’s authors define digital coin minting as an operation involving information infrastructure and equipment situated in the Russian Federation that results in the generation of digital currency. They also provide legal definitions for the circulation of digital currencies, mining pools, and mining facility operators.
A one-year “amnesty” period for registered miners will come if the Duma passes the law. They will be able to resolve any lingering concerns with customs clearance for imported hardware; pay necessary taxes, and comply with applicable rules.
The Russian government has attempted to create a complete regulatory framework for cryptocurrencies. The Finance Ministry has produced a bill “On Digital Currency” to remedy the legal loopholes left by implementing the statute “On Digital Financial Assets” last year. The department recently changed the draft to clarify various aspects of crypto mining. During its spring session, the Russian parliament is likely to pass this law and tax reforms.
