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Russian Officials Will Be Forced to Sell Their Crypto by April 2021

Russia passed its crypto laws in January, but many agree they are incomplete as they don’t offer the answer to some important questions, which include how local officials should deal with the cryptos they hold. At the same time, two legal initiatives are asking Russian public officials not only to declare but also do away with their crypto holdings completely.

Vladimir Putin signed on December 10th, 2020, a decree that forces public officials to disclose their crypto holding by the end of June 2021. The decree is part of the country’s digital financial assets law (DFA), which became effective on January 1st.

The decree states that Russian officials or individuals who want to hold public office must fully disclose all of their digital assets and if their spouse or children have any. The legislation aims to ensure that the government follows the same local financial declaration rules as regular citizens do.

Contradictions

Yet, at the same time, another regulation actually makes it illegal for some Russian officials to even own crypto as part of the country’s anti-corruption measures. At the end of December 2020, the Russian Ministry of Labour and Social Protection published a letter that reminded officials they are forced to liquidate any digital financial assets or digital currencies by April 1. This applies regardless of what the country of issuance is.

The restriction is aimed at individuals named in Part 1 of Article 2 of the Russian Federal Law from May 7th, 2013, No.79-FL. This stops certain groups of people from being able to store their funds abroad or use foreign financial instruments.

The individuals include those that run or hold deputy positions in public office, the entire board of directors of the Russian central bank, heads of district administrations, public corporations owned by the state, and others.

The letter mentions that other categories of public officials are not obligated to follow these restrictions, but they will still need to disclose any digital asset they own as per the decree that was signed by Putin.

How Will They Do It?

Russian authorities keep introducing new crypto rules for public officials, but it’s not clear how they will plan to monitor that from a tech point of view:

“There is still no law on the circulation of cryptocurrency. The authors of this initiative probably have their own vision about the implementation of these rules. Practice will show”. – Artem Grigoriev, head of the research lab at the Russian Association of Cryptocurrency and Blockchain

Maria Stankevich, a member of the Russian Committee on Blockchain Technologies and Cryptoeconomics, had the same question:

“The restrictions for the certain groups of the establishment for possessing the digital currency is actually a logical step in the attempts to stop corruption. […] This is a clear signal for all the officials that the government now has another lever to show its power when needed. However, the main question is how they will monitor it, as there is no such law or process”.
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