Russia Formally Proposes Fines and Ban on Bitcoin

LONDON — Russia’s anti-Bitcoin stance took a serious turn from open hostility toward actual criminality yesterday when the Ministry of Economic Development released its draft bill “On Amendments to Certain Legislative Acts of the Russian Federation“. The bill introduced a new term into the legal lexicon of the country: ‘Money Substitutes,’ a term which Russia intends to apply to any and all cryptocurrencies.

The move is hardly a surprising one.

In January of this year, the Central Bank of the Russian Federation published a recommendation to citizens and legal entities not to get involved with Bitcoin. In February, the General Prosecutor’s Office of the Russian Federation began meeting with representatives of the Central Bank “on a unified approach to the definition of the legal status of” Bitcoin.

And the legal status seems to have been more or less settled — the currency is not legal.

If the draft law is made official, anyone caught using money substitutes will be subject to a fine, the seriousness of which depends on the purpose for which the transaction was taking place and whether the body making the transaction was a citizen an official or a company.

The categories and fine amounts with amounts converted from Roubles to Dollars include:

Citizens – from $750 to $1250
Officials – from $1500 to $2500
Companies – from $12,500 to $25,000

Creation, as well as distribution, of software for the issue of money substitutes is punishable by an administrative fine in amounts identical to the above, but the draft resolution also criminalises any communication that aids in an eventual transaction.

Intentional dissemination of information that permits the issue of money substitutes and (or) the operation with their use is punishable by an administrative fine in the amount:

Citizens – from $125 to $1250
Officials – from $500 to 100,000
Companies – from $12500 to $25000

Curiously enough, simply using the cryptocurrency draws the risk of fines that are identical to the dissemination of information about it. The draft legislation will almost certainly become law in 2015 — and when it does, the possibility of Bitcoin going underground in Russia remains a distinct possibility.

by Ian Jackson (