The Finance Ministry of Russia Backs Regulations Proposed by Law Enforcement Agencies

The Finance Ministry of Russia Backs Regulations Proposed by Law Enforcement Agencies

 

The Russian Ministry of Finance has accepted a number of crypto regulatory proposals submitted by the country’s law enforcement departments. They cover a range of issues, including the seizure of digital assets and the reporting of information on cryptocurrency transactions. The ministry is responsible for drafting the legislation that will introduce comprehensive rules for the nation’s crypto space. It is only partially regulated at the moment.

The new bill "On Digital Currency" is expected to be filed with the State Duma, the lower house of the Russian Parliament, in May. A number of government institutions have provided feedback and suggested amendments to the draft, including several relevant ministries, the Federal Tax Service (FNS), and Russia’s financial watchdog, Rosfin Monitoring.

Law enforcement departments have also proposed certain provisions pertaining to their respective fields. The Federal Security Service (FSB) wants crypto exchanges and wallet providers to share information not only with courts but also with investigators working on cases involving digital financial assets.

The Ministry of Internal Affairs (MVD) believes that the draft law "On Digital Currency" does not fully detail the procedure that exchanges should follow when they have to freeze cryptocurrency funds following a court order. The department also calls for the adoption of rules for the establishment of wallets that will be used to store confiscated crypto assets.

According to a document seen by Izvestia, the Minfin has agreed to incorporate the proposals of the FSB and MVD into the new law. The ministry has also accepted the suggestion of the FNS to tighten regulations for unlicensed crypto exchanges and wallet providers. The tax service wants to ban the advertising of such platforms in Russia.

However, the finance ministry has rejected other initiatives by security and tax officials aimed at introducing harsher rules. The department considers it inappropriate to impose "excessive and strict regulations." At this stage of the crypto market’s development, experts have cautioned that it might cause an outflow of both customers and investors.

Meanwhile, Prosecutor General Igor Krasnov has reiterated his opinion that digital currency provisions should be added to Russia’s criminal law. This will help law enforcement investigate cases of cryptocurrency theft and seize crypto funds. In his annual address to the Federation Council, which is the upper house of Parliament, Krasnov noted that crime involving virtual assets was on the rise.