Russia's proposed regulations for crypto coming under fire

20 Apr, 2019
by David Borman
Regulation
Russia's proposed regulations for crypto coming under fire

It has been reported by Bitcoinist that the "digital assets" law currently being proposed in Russia has come under scruitiny even before it is to be reviewed by regulators in May. Concerns include how it will affect crypto businesses in the country, the fact it may cut off low income investors, and the reality that Russia can only regulate Russia, but crypto is worldwide.

The main purpose of the bill is to regulate ICOs in a way where small businesses can use them to raise funds. It also seeks to create a framework for both individuals and financial institutions to work with digital assets. However, there are some problems.

One, in its current form, the bill leaves the decision to the Russian central bank as to what will and will not be allowed to be bought and sold. This could put pressure on businesses that would otherwise operate in the country, but now may look elsewhere, leaving Russia overall behind in the crypto race.

Another concern is that it will drive a divide between basically rich and poor investors. It would demand that unless an investor is "accredited," they can only purchase up to $10,000 worth of crypto. However in order to be accredited, one must possess at least $150,000 worth of assets. It is literally an issue of people being too poor to be allowed to make more money.

Lastly, it has been pointed out that this regulation may be a bit futile, as Russia can only police itself, but crypto markets know no boundaries. In the article, Roman Khoroshev, founder of a Russian crypto crowdlending platform, is quoted:

"Undoubtedly, the central bank and lawmakers have good intentions in imposing restriction on unaccredited investors. It is usually their money that typically ends up in the hands of scammers. But the problem is in controlling this process. It’s almost impossible to track as the bill only proposes to regulate the cryptocurrency market within the Russian jurisdiction."

Ultimately, it will be up to Russian regulators to address these issues. Again, the proposal will be reviewed next month, so likely we will see some more info come out then. As always, stick with Chepicap for all updates!

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