Any person or entity that receives more than USD 1,300 worth of BTC per year must declare that income. Russian users reported difficulties accessing the LocalBitcoins website.
The authorities of the Russian Government are lobbying for the Digital Financial Assets (DFA) law to become increasingly strict. The Ministry of Finance proposed an amendment that includes fines and even prison for those who do not declare the ownership of Bitcoin (BTC) and cryptocurrencies in general.
The modification of the recently enacted law would force any natural or legal person to notify tax authorities whether they receive more than RUB 100,000 (USD 1,300) worth of cryptocurrencies per year, according to local media.
A person or entity that operates amounts of over RUB 1 million (USD 13,000) and does not declare them would face up to three years in prison and a fine of RUB 300,000 (USD 3,900).
Those traders who receive or trade more than RUB 5 million (USD 65,000) per year and do not declare them will be in a worse situation. The draft amendment suggests a fine of RUB 500,000 (USD 6,500) and prison for up to three years. Furthermore, the offenders could also perform forced labor for these last two cases.
In the case of those operators who record around USD 1,300 but decide not to report their transactions to the tax authority, they could receive a fine equivalent to 30% of the cryptocurrencies that they own. The penalty would never be less than RUB 50,000 (USD 650).
There would be such strict control of cryptocurrency funds that users should also submit an annual report on the transactions that they have conducted on the blockchain. The intention would be to determine amounts and balances in the different Bitcoin and cryptocurrency wallets that a person may be using.
According to local media, the representatives of the Ministry of Finance will meet to formalize their proposals before the law goes into effect on January 1st, 2021. The Ministry of the Interior, the Federal Tax Service, the Attorney General, and the Central Bank are among the agencies that are already aware of the draft amendment.
All those operations that users could conduct with Bitcoin in the country interest the Ministry of Finance. The agency also seeks to modify the DFA to legalize Bitcoin mining, but without the miners directly receiving the incentives that the activity creates.
Blocking LocalBitcoins in Russia
In recent days, the platform for the P2P exchange Localbitcoins announced on its Twitter account that access to the website for local users was not available. The company suggested that users in Russia should use a VPN to access it and apologized to them for any inconvenience.
According to local media, the Federal Service for Supervision of Communications, Roskomnadzor, authorized the blockade.
The decision by courts in the Arkhangelsk region, in which they argue that Russia’s national currency is the ruble and that there is a ban on any issuance of money, might have led to the restriction. However, it remained unclear whether the suspension is temporary or permanent.
It is important to remember that, to evade government restrictions, Russian users had access to the P2P market through an alternative URL, that of localbitcoins.net.
By Alexander Salazar
