After analyzing the bill «About alternative ways of attracting investment (crowdfunding), On digital of financial assets» and «About modification of parts the first, second and fourth Civil code of the Russian Federation», the Russian Association of cryptocurrency and blockchain (RAKIB) has prepared comments to the draft Federal laws and sent them to the Expert Council under the State Duma Committee on financial market.
In the work took part the leading lawyers of the St. Petersburg office of Dentons, a law firm «Liniya Prava», companies Debevoise & Plimpton Llp, Ingvarr Advisory & Trust, LLC «Tekhprombiznes» and Herbert Smith Freehills CIS LLP.
In particular, experts believe that the bills do not allow for circulation of cryptocurrency, including its use in attracting investment by issuing tokens (ICO). Also, the bill does not contain answers to significant market issues relating, for example, the ability of Russian legal entities and individuals to purchase tokens and cryptocurrencies abroad, and also to place a token within the ICO in other jurisdictions.
The experts also drew attention to the introduction of new concepts – «digital rights» and «digital money», while worldwide all participants use a common name – «token» and «cryptocurrency».
«The bills need improvement in terms of unification of applied terminology and definitions, as well as a uniform definition of the status of crypto-currencies and tokens» – said on the website RAKIB.
«When choosing what term to consider the transborder nature of the cryptocurrency market and, perhaps, in this regard, it is advisable to maintain applicable to all participants of the name – «token» instead of «digital rights», «cryptocurrency», instead of «digital money», they stressed.
Experts specify that, if in fact the current cryptocurrency market, in both international to the national scale, in the framework of the Russian law enforcement cryptocurrency delivered outside the legal field.
«It leads, including to well-known problems related to the fact that the courts denied judicial protection of the rights of requirements relating to the cryptocurrency, law enforcement agencies need to recognize the information about the cryptocurrency illegal information, and the system of arbitration courts appeared in the recent decision, which denied the possibility of incorporating cryptocurrencies into the bankruptcy estate in bankruptcy and, therefore, its inclusion in civil turnover», follows from reviews.
In addition, among the three bills there are clear contradictions – so one of the laws is considering the possibility of using cryptocurrency as a means of payment, other two do not.
«Thus the revolution of cryptocurrencies in the country will remain in the «grey» unregulated zone. It is necessary to allow physical and legal entities to use the cryptocurrency as means of payment by agreement between them» – experts say.
The draft law «On crowdfunding» generally excludes the possibility of making cryptocurrency as an investment in the conduct of ICO and the location of the token is allowed only through operator investment platform that «eliminates one of the advantages of conducting transactions through the technologies of the distributed registry is the eliminate middlemen and reduce the costs of the participants.»
«It appears that the adoption of the draft law in the proposed revisions will not allow to create on the territory of the country for proper regulation, do not create a favorable investment climate and encourage investors to care more loyal to a foreign jurisdiction», – summed up in RACIB.