Yesterday the state Duma unanimously adopted
in the first reading three draft laws concerning the regulation of cryptocurrencies and the ICO: «On digital of financial assets», «On attracting of investments using investment platforms» and «digital rights». Deloitte Legal has commented
the main provisions of the new laws and their possible impact on Russian cryptocurrency community.
First and foremost, the firm’s lawyers note that «despite the heterogeneity of definitions and approaches to regulation, none of the draft laws can not be considered prohibitive.» Each of the proposed legislation recognizes the legal force of the new forms of economic instruments — financial a digital asset, digital rights, or token. Artem Tolkachev, Director of «Deloitte Consulting» says:
«The consideration of bills in the State Duma — a logical continuation of the discussion, which was primitively lawyers and kriptosmartfon. Of course, these bills are awaiting deep processing, however, I hope that the policy establishing clear market rules will remain.»
The benefits and limitations of the transactions with cryptocurrencies
Deloitte Legal note that the draft law on digital of financial assets and amendments to the Civil code of the Russian Federation cryptocurrencies are separated from the token, and the project is about crowdfunding in General no notion of cryptocurrency. Lawyers believe that the emergence of the laws of the term «cryptocurrency» should have a beneficial impact on business that is currently experiencing great difficulties due to negative clarification from the regulators and legal practice.
The legality of transactions with cryptocurrencies is questioned in almost any country where there is no clear position of regulators on the question of what cryptocurrencies are and how they should be addressed from the legislative point of view, and in this respect, the new bills can be considered good.
According to representatives of Deloitte Legal, even at this stage it is clear that the proposed regulation on many issues do not correspond to the real situation, and therefore its application will be either impossible or ineffective. In particular, they mention the treatment of cryptocurrency, which is set in the bill about digital assets – namely, its rigid regulation, which greatly complicate the participation of investors and issuers in the turnover of digital assets. In particular, we are talking about significant restrictions on operations that can implement the exchange operators digital of financial assets.
Lawyers also noted that the new bills involve a fundamental change in concepts of operations with the digital asset that is now accepted – the need for a digital wallet that can be opened only Russian operator of digital exchange of financial assets.
Also, the report says that given the other restrictions of the bill on digital assets, the attractiveness of Russian projects for foreign investors will be significantly reduced. Moreover, the involvement of Russian residents in foreign ICO-projects no violations of Russian law would be virtually impossible.
Difficulties with ICO
Amendments to the Civil code indicate the possibility of using digital money as means of payment. However, in accordance with the special law to which the amendment refers, it is impossible to use cryptocurrency for making payments for transactions on acquisition of the token. This will significantly impede the ICO, as noted in Deloitte Legal:
«Today, most projects use smart contracts, attracting funds in cryptocurrency. In the concept of the traditional ICO also do not fit, and the provisions of law on crowdfunding: investment in the project may only be exercised by cashless cash [in rubles], which are listed on the nominee account operator investment platforms.»
Establishing simple rules of information disclosure for issuers in the draft law on digital assets most likely due to the fact that the legislator relies on investor protection by imposing restrictions on participation in funding (only qualified investors can participate in the ICO, for all other restrictions will be imposed). This limitation, in connection with the established practice, may have a negative effect on raising funds.
Representatives of Deloitte also noted that a wide range of rights that can impersonate tokens that effectively allows the Issuer to choose any strategy to justify their sale. In this case, none of the bill is not expected to consolidate the investment agreement, which could become one of the most sought after designs on the market. Lawyers believe that the restrictions can «call into question the viability of crowdfunding as an alternative», as qualified investors are rarely interested in small investments, which involve the ICO projects.
At the end of his report lawyers Deloitte note that «none of the bills that are still proposed as the basis for the regulation of cryptocurrencies in Russia, did not raise issues of accounting and tax accounting of digital assets and does not consider details of foreclosure on a digital asset in the framework of enforcement proceedings on account of the many peculiarities related to their issue and circulation».
Because of this, in the short term the proposed regulation as currently drafted is unlikely to be able to cover the basic questions of investors and Internet projects, and the attractiveness of the Russian market this way will be questioned.