Russian Finance Ministry Submits Draft Law for Stricter ICO Regulations
On January 25, 2018, the Russian Ministry of Finance drafted a federal law associated with the legal status of Initial Coin offerings (ICOs) and Digital Assets. The legislation is important for the crypto space as it elucidates the requirements surrounding the launch and participation in ICOs.
In December 2017, the State Duma committee signaled its plan to submit the law on cryptocurrencies. However, the bill has yet to pass either the lower or upper house of the Federal Assembly and the Federation Council in Russia.
Limited Provision for Investors
Under the agreement with Russia’s Securities Law, unlicensed investors are allowed a maximum investment of $900 (50,000 rubles for each token sale. The draft provisions no limit for registered or qualified investors.The legislation indicates Russia’s way of addressing the growing trend in ICO investments. Also, the proposed law delineates what ICO should include.
Further, for the ICO to comply with the law, it has to provide regulators information on the legal name of the token issuer, permanent operating bodies of the token, network providers, and project websites. Moreover, the proposed law restricts the use of cryptocurrencies as a form of exchange in the country.
“It should be noted that use of cryptocurrencies as the means of payment will not be provided for in the territory of Russia.”
In attempts to fully crackdown on shady startup activity, the regulatory body has also banned the use of promotional activity before the launch of the token. The move from the Ministry of Finance is in response to the growing fraudulent ICO’s in the crypto market.
“Prior to the publication of an offer for the release of tokens, the tokens that are issued may not be offered to potential purchasers in any form or by any means using advertising.”
The draft also explains how the exchange of cryptocurrencies to fiat currencies will be permitted in the country. The Finance Ministry explained that, “This draft law contains a disagreement with the Bank of Russia regarding the possible exchange of cryptocurrency to ruble, foreign currency and/or other property. According to the Bank of Russia, such deals can be permitted only for tokens that are issued for raising funds.”
The new draft law stems from Russian President Vladimir Putin’s directive from last year, but it seems the Russian government is no mood for a complete ban on cryptocurrencies.
Will Russia willingly embrace ICO and cryptocurrencies? Let us know in the comments below.