Some Russian officials will be forced to sell their crypto by April 2021
A new law is forcing some Russian officials to go public with their cryptocurrency investments, while others will have to liquidate them altogether
In January, Russia adopted its cryptocurrency law, but this legislation does not provide a straightforward answer to some questions, including how local officials Bitcoin Circuit should manage their digital assets. In fact, there are at least two other bills that require Russian civil servants to declare or even get rid of their cryptos altogether.
On 10 December 2020, Russian President Vladimir Putin signed a decree requiring certain officials to make their cryptocurrencies public by 30 June. The decree was adopted as part of the „On Digital Financial Assets“ law, or DFA, which came into force on 1 January.
According to the decree, Russian officials or individuals who intend to hold public office must disclose their digital assets, as well as those of their spouses and children. The law aims to ensure that public administrators are subject to the same financial reporting rules as ordinary citizens.
But there is also another regulation that bans some Russian officials from owning any cryptocurrency, in line with the country’s anti-corruption measures. On 28 December 2020, the Russian Ministry of Labour and Social Protection published an information letter reminding certain officials that they are obliged to liquidate all their crypto assets by 1 April, regardless of the country of issue.
Executives and their deputies
This rule specifically refers to individuals listed in Part 1 of Article 2 of Russian Federal Law No. 79-FL of 7 May 2013, which prohibits certain categories from keeping their funds abroad and using foreign financial products. The list includes a large number of important public officials: executives and their deputies, members of the board of directors of the Russian Central Bank and public companies owned by the Russian Federation, heads of district administrations and several others.
In the letter, the ministry mentioned that other categories of civil servants are not subject to these restrictions, although they still have to report their digital assets to comply with the decree signed by Putin.
While Russian authorities continue to introduce new rules regarding cryptocurrencies for civil servants, it is not immediately clear how compliance will be handled from a technological perspective. Artem Grigoriev, head of the research lab at the Russian Cryptocurrency and Blockchain Association, told Cointelegraph:
„There is no law on the circulation of cryptocurrencies yet. The authors of this initiative probably have their own views on the implementation of these rules. Practice will show that.“
Maria Stankevich, a member of the Russian Committee for Blockchain Technology and Cryptoeconomics, also questioned the technological and legal feasibility of these rules:
„The restrictions imposed on certain sections of the establishment regarding the ownership of digital assets are actually a logical move in an attempt to stop corruption. […] This is a clear signal to all officials: the government now has another lever to show its power when needed. However, the main question is how they will monitor the application of this rule, since there is no law or process in this area.“