Russia adopted its cryptocurrency law in January, but this legislation does not provide a direct answer to some questions, including how local officials should deal with their crypto holdings. There are at least two other legal initiatives requiring Russian public officials to declare or even get rid of their cryptocurrency holdings entirely in 2021.
On Dec. 10, 2020, Russian President Vladimir Putin signed a decree obliging some public officials to disclose their crypto holdings by June 30. The decree was adopted as part of the country’s law “On Digital Financial Assets,” or DFA, which was made effective on Jan. 1.
According to the decree, Russian officials or individuals seeking to hold public office must disclose their digital assets, as well as those of their spouse and children. The legislation refers to a general scope of the official establishment, seeking to ensure that the government is as compliant with the local financial declaration rules as ordinary citizens already are.
But there is also another regulation that prohibits certain Russian officials from owning any cryptocurrency, in line with the country’s anti-corruption measures. On Dec. 28, 2020, the Russian Ministry of Labour and Social Protection published an informational letter reminding some officials that they are obligated to liquidate their digital financial assets and any digital currencies by April 1, regardless of the country of issuance.
This restriction specifically refers to individuals listed in Part 1 of Article 2 of the Russian Federal Law from May 7, 2013 No. 79-FL, which prohibits certain categories of persons to store their funds abroad as well as use foreign financial instruments. The list includes a broad number of key public positions, including running and deputy positions in public office, 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 mentioned that other categories of public officials are not subject to these restrictions, though they still need to disclose their digital assets in line with a decree signed by Putin.
While Russian authorities keep introducing new crypto-related rules for public officials, it’s not immediately clear how they will monitor compliance from a technological 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 vision about the implementation of these rules. Practice will show.”
Maria Stankevich, a member of the Russian Committee on Blockchain Technologies and Cryptoeconomics, also questioned the technological and legal feasibility of implementing the rules:
“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.”
Ray Schuetz received a Masters Degree in computer science from The University of Texas (Austin). Ray has been working as a full-time blockchain consultant for the past 3 years. In his spare time, Ray enjoys writing for EthereumCryptocurrency.com and other crypto news publications.