- By launching noncustodial crypto-wallets, bankers will establish accountability to prevent capital outflow. Russia is seeking to construct a closed-loop of cryptocurrency circulation, which necessitates stringent responsibility. The civil law approach has some drawbacks.
- The ABR believes that using a criminal law approach to crypto-market regulation will allow all subjects to be treated equally as persons liable to pay taxes, removing the inconsistency between the Bank of Russia and the Ministry of Finance’s systems. While Andrei Lugovoy (deputy head of the working group) acknowledges the concerns, he believes the ABR approach will merely delay the legalization process.
- If a debtor is linked to an anonymous cryptocurrency wallet, a person may be offered the option of issuing a crypto key or being punished for concealing property in the form of digital money under civil law.
Russian banks are warning citizens to refrain from storing cryptocurrency in non-custodial wallets. The Association of Banks of Russia (ABR) suggests instead a third-party custodian that can freeze, block, or seize bitcoin in a letter to the central bank. Undeclared crypto assets in a non-custodial wallet will result in criminal penalties against the owner, according to the new legislation. The Russian Central Bank, Rosfinmonitoring, and the Ministry of Finance all received ABR’s concept.
The Inconsistency Between The Bank Of Russia
This concept was presented to a working group of the State Duma’s expert council on cryptocurrency legislation. The concept of criminal culpability was opposed by a number of market participants and lawmakers. The ABR believes that using a criminal law approach to crypto-market regulation will allow all subjects to be treated equally as persons liable to pay taxes, removing the inconsistency between the Bank of Russia and the Ministry of Finance’s systems. While Andrei Lugovoy (deputy head of the working group) acknowledges the concerns, he believes the ABR approach will merely delay the legalization process.
In a letter to the central bank, the banks association took a step back, suggesting that it could be better to criminalize not turning over keys rather than merely holding a non-custodial wallet. This strategy would be implemented within the umbrella of civil law. If a debtor is linked to an anonymous cryptocurrency wallet, a person may be offered the option of issuing a crypto key or being punished for concealing property in the form of digital money under civil law.
The Russian Strategy Towards Closed Loop Cryptocurrency Circulating
By launching noncustodial crypto-wallets, bankers will establish accountability to prevent capital outflow. Russia is seeking to construct a closed-loop of cryptocurrency circulation, which necessitates stringent responsibility. The civil law approach has some drawbacks. The technical difficulties of establishing a noncustodial wallet without the owner’s consent make asset seizure nearly impossible, according to Valery Tumin, Chairman of the Russian Union of Taxpayers’ Commission for the Development of Digital Financial Assets.
Russia’s recent announcements to legalize cryptocurrency have gotten a lot of attention, but could this be a double-edged sword? If the government takes a criminal approach, Russians will be barred from most of the decentralized application space, decentralized finance area, and decentralized autonomous sector, raising concerns about civil liberties in an ostensibly democratic system.
ALSO READ: A Prominent Crypto Fund Highlights Risks In Ethereum’s Merge: When It Would Exactly Take Place?
Source: https://www.thecoinrepublic.com/2022/04/25/the-russian-banking-union-demands-non-custodial-accounts-outlawed/