Moscow greenlights draft laws for caps on crypto investments

The executive power in Russia has approved a cap on coin purchases for ordinary citizens as part of new legislation legalizing crypto investment and trading.

The upcoming rules are also reducing the assets that non-professional investors can buy to only the most liquid cryptocurrencies pre-approved by the central bank.

Moscow caps crypto investments for most Russians

The federal government of Russia has approved a package of bills designed to regulate cryptocurrency transactions and place them under strict state control.

Three pieces of legislation have been greenlit at a meeting of the Cabinet of Ministers in Moscow, according to a press release published Monday.

These are the draft laws “On Digital Currency and Digital Rights,” “On Amending Certain Legislative Acts,” and “On Amending the Code on Administrative Offenses.”

The announcement emphasized that the bills have been “developed as part of an action plan to ‘legalize’ certain sectors of the economy,” but media reports highlighted the restrictions they are introducing.

While significantly expanding access to digital assets to officially include even non-qualified investors, Russia is severely limiting exposure for most people.

Under the new rules, which will be passed by the summer, ordinary Russians will be permitted to acquire no more than 300,000 rubles’ worth of crypto a year through a single intermediary.

The annual threshold, equal to less than $3,700 at the ruble’s current exchange rate with the dollar, has been fixed in legal writing for the first time.

While the cap was first pitched months ago, recent statements by officials did not specify the amount, as noted by the crypto news outlet Bits.media.

Then, most Russians will be allowed to buy only the most liquid cryptocurrencies, whitelisted by the Bank of Russia, after passing a test to determine their awareness of the risks.

Qualified, professional investors will undergo testing, too, but they will have no limit on their purchases and will be able to add almost any digital currency to their portfolio, except privacy-oriented coins.

Russia to ban crypto transactions outside regulated market

The provisions approved by the Russian government prohibit cryptocurrency transactions without using regulated intermediaries.

They introduce a licensing regime for such platforms, including crypto exchanges and depositories, existing stock exchanges and trustees.

Banks and brokers will be authorized to join the digital assets market as well but will be subjected to special prudential requirements.

The legislation leaves the door open for some cryptocurrency operations outside the framework of the domestic market.

Russians will be able to purchase digital currencies abroad, as long as they pay for the coins from foreign accounts and transfer foreign currency purchased through local intermediaries.

In all these cases, Russian residents will have to notify the Federal Tax Service (FNS) of their foreign transactions, the Ministry of Finance underscored in its press release.

The bills introduce various penalties for violators. For example, amendments to the Code of Administrative Offenses target the organizers of trading platforms that don’t meet the new requirements.

Meanwhile, the head of the State Duma Committee on Financial Markets, Anatoly Aksakov, indicated that Russians may be banned from using foreign exchanges altogether.

Speaking to the Gazeta.ru website, the high-ranking lawmaker confirmed the legislation will be filed with the lower house of parliament this week and highlighted:

“It is expected that trading in crypto instruments through foreign exchanges that do not work with Russian licensed intermediaries will be prohibited.”

Aksakov stressed that trading under the upcoming framework will be safer than peer-to-peer transactions. He also insisted that the 300,000-ruble limit is sufficient to allow Russians to test the market without risking bankruptcy.

Quoted by the official newspaper Rossiyskaya Gazeta, Russian Prime Minister Mikhail Mishustin also stated that “using cryptocurrencies will become easier and safer” when citizens and businesses start buying and selling them domestically.

Critics have commented that with its attempt to regulate digital assets, Russia is effectively dropping an iron curtain on the crypto market, as recently reported by Cryptopolitan.

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