Russia has passed the cryptocurrency law in January, but this legislation does not directly answer some questions, including how local officials should handle their crypto holdings. There are at least two other legal initiatives requiring Russian government officials to fully declare or even get rid of their cryptocurrency holdings by 2021.
On December 10, 2020, Russian President Vladimir Putin signed a decree requiring some government officials to disclose their crypto holdings by June 30. The decree was passed as part of the national law “On Digital Financial Assets”, or DFA, which went into effect January 1.
Under the decree, Russian officials or persons wishing to hold public office must disclose their digital assets, as well as those of their spouse and children. Legislation refers to a general scope of the official establishment, to ensure that the government is like in accordance with local financial reporting rules as ordinary citizens already are.
But there is also another regulation banning certain Russian officials from owning cryptocurrency, in line with the country’s anti-corruption measures. On December 28, 2020, the Russian Ministry of Labor and Social Protection published an informational letter to remind some officials that they are required to liquidate their digital financial assets and any digital currencies by April 1, regardless of the country of issue.
This restriction specifically applies to persons listed in Part 1 of Article 2 of the Russian Federal Law of May 7, 2013 No. 79-FL, which prohibits certain categories of persons from storing their money abroad and using foreign financial instruments . The list includes a large number of important public positions, including leadership and deputy positions in public positions, the board of directors of the Russian central bank, public corporations owned by the Russian Federation, heads of district administrations and several others.
In the letter, the ministry stated that other categories of government officials are not subject to these restrictions, although they are still required to disclose their digital assets in accordance with a decree signed by Putin.
While the Russian authorities continue to introduce new crypto-related rules for government officials, it is not immediately clear how they will monitor compliance from a technology standpoint. Artem Grigoriev, head of the research lab at the Russian Association of Cryptocurrency and Blockchain, told Cointelegraph:
“There is still no law on the circulation of cryptocurrency. The authors of this initiative probably have their own view on the implementation of these rules. Practice will show. “
Maria Stankevich, a member of Russia’s Committee on Blockchain Technologies and Cryptoeconomics, also questioned the technological and legal feasibility of implementing the rules:
“Restricting certain groups of the establishment to owning the digital currency is actually a logical step in the effort to stop corruption. […] This is a clear signal to all officials that the government now has a different leverage to show its power when needed. However, the main question is how they will oversee it, since there is no law or process. “