The State Duma introduced a bill on cryptocurrency: miners will be forced to register as an IP

On March 20, 2018, State Duma deputies A.G. Aksakov, I. B. Divinsky, O. A. Nikolayev, R. M. Mardanshin, as well as a member of the Federation Council N. A. Zhuravlyov presented Bill No. 419059-7 “On Digital financial assets

The objectives of the draft law are as follows: legislative consolidation in the legal field of definitions of cryptocurrency, token, distributed registry of digital transactions (blockchain) and smart contract; the creation of legal conditions for attracting legal entities and individual entrepreneurs with investments by issuing tokens.

According to the bill, both cryptocurrency and token are property . It is directly established that digital financial assets are not legal tender on the territory of the Russian Federation.

In addition, mining is recognized as an entrepreneurial activity in the case when the person who performs it for three consecutive months exceeds the energy consumption limits set by the Russian government.

The bill establishes the legal basis for the implementation of mining and validation of digital transactions (activities to confirm the validity of digital records in a distributed registry of digital transactions).

Digital property (tokens and cryptocurrency) can be exchanged for rubles or foreign currency. In this case, the possibility of exchange, as well as the procedure and terms of exchange will be determined by the Bank of Russia in coordination with the Government of the Russian Federation. All transactions should be carried out through the operators of the exchange of digital financial assets , which can only be legal entities created in accordance with the law. Transactions must be conducted in accordance with the Rules for Organized Trading of Digital Financial Assets Registered with the Central Bank of the Russian Federation.

Digital records containing information about such transactions will be stored in digital wallets opened to the parties to the transaction by the digital financial asset exchange operator. The procedure for opening, storing information about digital records, maintaining and closing a digital wallet, as well as requirements for the protection of digital wallets are established by the Central Bank of the Russian Federation.

A special place in the bill is taken by the article that establishes the legal basis for holding an ICO. This article establishes the sequence of actions required for the ICO, defines the composition of the mandatory public offer and establishes the need for additional information to be disclosed by the person issuing the tokens.

The public offer on the release of tokens must be signed by a reinforced qualified electronic signature of the person performing the functions of the sole executive body of the legal entity - issuer or individual entrepreneur - issuer.

To protect unqualified investors (ordinary citizens), the bill empowers the Bank of Russia to impose restrictions on the amount of tokens acquired by such persons. It is assumed that unqualified investors with an investment amount of up to 50 thousand rubles will be able to participate in the ICO.

Now the bill has been submitted to the State Duma’s Financial Market Committee for consideration. The deadline for submitting comments, suggestions and comments expires on April 3, 2018. Presumably in April it will be submitted for consideration by the State Duma.

After the adoption of the law, a number of by-laws will be required, as well as amendments to the administrative and criminal code for persons violating the law. For example, criminal liability for the illegal circulation of money substitutes can be up to four years in prison .

Miners who do not register as individual entrepreneurs will be prosecuted for illegal business activities under article 171 of the Criminal Code of the Russian Federation , which is punishable by a fine of up to 300 thousand rubles. or compulsory work for up to 480 hours, or arrest for up to 6 months. The same act committed by a group or associated with the extraction of income on a large scale is punishable by a fine of up to 500 thousand rubles. or forced labor for up to 5 years or imprisonment for up to 5 years with a fine.

Now proposals for the use of electricity by miners of electricity and their possible responsibility are being prepared by the Ministry of Communications. According to experts, it is very easy to calculate miners using a 24-hour power consumption profile.