Penalties for the issuance of so-called money surrogates (cryptocurrencies) have been tightened by The Russian Finance Ministry as previously expected.
According to Russian news provider Interfax and its unnamed source, individuals who issue money surrogates shall face as many as four years imprisoned, while the executives of financial companies, issuing their own money surrogates could spend as many as seven years in prison. Furthermore, they shall be restricted from holding such job positions in the future.
As for the fines, connected to a money surrogate issuance, Interfax reported:
1. range of: RUB 500,000 – RUB 1 million, (almost $7,000 – $14,000).
2. for executives from financial companies: up to RUB 2.5 million (around $35,000).
Russia has already informed before, that it is considering legislation to have this sector more under control and regulate strictly any activities related to money surrogates, which under the classification of non-government issued currencies that includes bitcoin and other cryptocurrencies. These proposals have come since 2014.
An advisor to the Russian President Vladimir Putin has already informed on February that cryptocurrencies, and most of all bitcoin, should be seen as a criminal act. Nevertheless, Russian central bank has informed about its interest in the blockchain technology and has already set a working group to examine possible advantage of its use.
Financial pyramids to be fined in Russia
Earlier this week, Vladimir Putin has also signed the “Federal Law On Amendments to the Russian Federation Code of Administrative Offences”, where there are higher penalties for any support of financial pyramids specified.
The Law introduces administrative fines for individuals, as well as for companies that organize financial pyramids and attract investors to them. Moreover, there are fines introduced for any acitivities, supporting the public to take part in such projects.
However, the highest fine will be only RUB 50,000 ($712) for individuals while the maximum financial penalty for employees of the company shall be RUB 100,000. Companies could get a fine up to RUB 1 million. This is proportionally much lower as the penalties for cryptocurrencies, mentioned above, according to Interfax.
The financial pyramid is defined in the law as an entity which pays to existing investors from the investments of new investors. Another characteristic of a financial pyramid is that it does not conduct a legal activity with the funds attracted.
The Russian Duma passed the law on February 19, 2016, whereas the Federation Council approved it on March 2, 2016.
Another proposal, still on the table, includes amendments to the Criminal Code and will introduce a penalty of up to 6 years in jail for those who set up financial pyramids.
You can read the official statement of Kremlin in English here.
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