Russian Crypto Bill Needs Major Changes, Lawmakers Say

Russian lawmakers have decided to push back a draft bill called “On Digital Financial Assets” to the initial reading stage, after a review showed there was a need for major changes, business newspaper Kommersant reports.

The newspaper notes that Pavel Krasheninnikov, the head of the council and chairman of a State Duma committee, notes that there’s no connection to crypto or digital tokens in the document. Based on the wording provided, lawyers added that the regulations would directly conflict with the requirements imposed on Russian corporations.

Every single piece of terminology that would correspond with crypto or tokens instead says “digital rights.” According to lawmakers, this muddles the difference between “digital rights” and “digital financial assets.” Last month, writers of the bill even eliminated what the industry defines as “mining” for the cryptocurrency. With almost a year since the draft was originally introduced, it was approved in May, during the first of three readings by the State Duma.

According to experts in September, the legislation was a sore “disappointment,” which can be largely due to the lack of coordination between writing the three bills that would apply. With all of these delays, Russia is easily falling behind the pace of other countries in the area for regulation. In fact, according to the head of research and development at Infralex, Olga Pleshanova, the current version of the bill would take the economy back by nearly three decades.

Olga Pleshanova, the head of research and development at law firm Infralex, told Kommersant that lawyers believe the bill in current form will bring the Russian economy back to the 1990s, including widespread financial pyramid schemes.

Towards the end of October, the new draft of the bill added that owners of privately held companies can create and sell so-called “digital financial assets (DFA)” that act as digitized equity for the company.

In regards to the conflict with Russian corporate legislation, Kommersant notes that lawyers were concerned that the simplification of shares in limited liability companies (LLC) in digital form will mix legal entities by turning them into “kind of pre-existing ‘closed’ (now ‘non-public’) joint-stock companies.”