The Ministry of Finance announced the methods of legal regulation of cryptocurrency and ICO. We are talking about the draft Federal law «On Digital of financial assets». It aims to raise financing in the ICO aims to determine rules for the treatment of digital money. However, many experts agree that the document needs serious revision.
Comments on the draft law of the Ministry of Finance to Bits.media provided experts, practitioners in the field of blockchain: head of the working group of the State Duma of the Russian Federation estimated the risk of turnover cryptocurrency Elina Sidorenko, head of the blockchain technology law office CHEAP and Mikhail Uspenskiy partner of the law firm Nektorov, Saveliev & Partners Alexander Nektorov.
FZ «On digital of financial assets» — predictions and implications of
The bill will leave many questions beyond the scope of legal regulation, experts say. For example, lawyers not clear what rights and obligations have market participants and what are the criteria of legitimacy tokens and cryptocurrencies. Legislators explained what to look for in the offer and the proposal to hold ICO. However, it is not explained, on what conditions there are tokens and how do they compare with the current status of the securities. In addition, the new bill smart contract identified in the contract. Meanwhile, in the Civil code there is no concept of a smart contract. Thus, in the case of the bill, lawyers will not be able to protect the interests of the people who signed smart contract.
The bill in its current form is the system of regulation of technologies of distributed registries, focuses only on the issues of ICO, experts believe. However, due to low legal technique it blocks the usage of crypto-technology in the other directions. First and foremost, this is due to incorrect understanding of the essence of a «token».
Mikhail Uspensky: «The Ministry of Finance proposes to issue tokens for the sake of money, which runs counter to their purpose. The most correct, but not perfect, it seems to me the definition of the token given in the Decree of the Minsk PVT. It says that a token is a digital display of existing objects of civil turnover».
Also experts doubt that the bill will allow people to freely exchange cryptocurrency on the so-called computational platforms. Most likely, the exchange of digital money will be able to deal only with professional participants of the market. The legislature has not explained who will give a license to conduct this activity, and who will be entitled to receive it.
Elina Sidorenko: «The maximum limit of investment by individuals in ICO — 50 000 rubles. I do not understand, on what conditions and when a person can make the money. It is also unclear why the threshold is 50 000 rubles. We conducted research at the Center for digital economy and financial innovation at MGIMO of the MFA of Russia and found that in the regions the threshold of investment must not exceed 20 000 rubles, and in Moscow — 150 000».
From the bill it also follows that trade crypto-currencies through brokers authorised by the regulator, the exchanges will not only qualified investors, but to everyone. Cryptocurrency transactions can make anyone «digital operator» will open a special «digital account» within belonging to the operator of the purse.
Mikhail Uspensky: «The bill says that the order of opening and maintenance of these special accounts established by the Central Bank of the Russian Federation. That is, the Central Bank can set requirements on the principle of «a little less than for qualitymaster». Moreover, there is a contradiction with the definition of «digital wallet» at the beginning of the bill, which may give the impression that the operator opens the crypto-wallet to the person or company, not yourself.»
Alexander Nektorov: «The chances that a law like this will come into force absent or very low, because we see the signals from the Central Bank that the bill in this form too liberal. Indeed, if not to go into details and do not much blame the Finance Ministry for the quality of the formulations, then, in principle, the bill is a very good concept…. In General, they allow circulation of cryptocurrency using the little difficulties, that, first, this is done through specialized organizations, or organizers of the auction. In some cases, you can use a custom calculation, nothing more. Secondly, it allows carrying out the ICO without any major limitations for qualified investors. For unskilled investors set the bar 50.000 RUB… If this law is passed, it’s just happiness for all market participants, but in reality this will not happen».
Under the bill, all cryptocurrency transactions subject to mandatory registration in a special register of assets. However, the document no indication of how and who will maintain this registry.
The lack of answers to these and other questions leads experts to think that after the adoption of the draft law «On digital of financial assets», in the Russian legislation there will be many amendments. Maybe lawmakers removed some crypto-currencies from a list of possible trafficking or to develop a certification model mining services, then these organizations will be illegal.
Cryptocurrencies are the object of exchange or means of payment?
Recognition of cryptocurrencies as «property» have sparked controversy in the legal community. On the one hand, the property can be equated with property rights. This is evidenced by article 128 of the Civil code of the Russian Federation.
Mikhail Uspensky: «In my opinion, crypto-currencies have a greater resemblance to «property rights». By the way, in Russia and uncertificated securities, and non-cash assets are property rights. The cryptocurrency with them, much more essential similarities than with chairs, a potato or a brick, that is, with things, with material objects».
On the other hand, if people begin to use cryptocurrencies as the object of exchange, digital money will be the means of payment. That is why the Central Bank opposes the adoption of the draft law «On digital of financial assets», for fear that the cryptocurrency will gradually displace ruble as means of payment.
Despite the fact that now digital money is not legal tender, the parties to the transaction can use them in circulation. For example, if critobulus will be a «tsifrovomu», the parties to the transactions will be able to conclude barter agreements: the pie in exchange for cardan or dash.
Elina Sidorenko: «We will have to go with the digital money as foreign currency. In Russia we can’t buy anything in a foreign currency, however, we can purchase it and also something for her to exchange».
Alexander Nektorov: «One of the reasons why the Central Bank is strongly opposed to this bill — the Central Bank is afraid that the crypt gradually replace the ruble as means of payment. And I think that future bills will be more stringent conditions, limiting, for example, a legal entity make the crypt as a means of payment. However, even if it is property, it can be used as a medium of exchange. The crypt is a property that can be used for exchange and for exchange transactions. It is the business of barter, it is a subspecies of sale. Overall, it is the same, the only difference from the sale and exchange of property. This is how to interpret operations with crypt in relation to the acting civil legislation».
Own cryptocurrency? Pay taxes!
The draft law «On digital of financial assets» specifies that mining is a commercial activity. On the basis of statements of Ministry of Finance, this is done primarily in order to force citizens-miners to pay taxes. This means that the so-called «hamsters» that is home to miners with a small capacity, will have to register their activities, otherwise they will come a criminal liability for illegal business.
Elina Sidorenko: «Criminal liability for «hamster» comes, when the amount namining of funds will exceed 2 250 000 rubles. I believe in 80% of cases, «hamster» will attract criminal liability. That is, installing the program and running a priori puts a person beyond the law. The paradox lies in the fact that 2 250 000 rubles — this is not net profit «hamster», and the amount namining of the funds, and amortization».
Alexander Nektorov: «Mining is defined here as entrepreneurship. It is clear that we have a professional miners, who buy in large quantity equipment and earn income from which to pay taxes. Just the definition given in the bill, it is necessary to simplify the payment of taxes from the miners. But there are non-professional activities. I’m on the phone or on the computer to install the software that will create a cryptocurrency, or to do their validation. I’m doing this professionally, on my personal computer, I have no industrial capacity. Am I suddenly began to engage in entrepreneurial activity? Most likely, the next step will be the establishment of a special regime of taxation for such activities is something like a patent or a fixed fee. For «hamsters» there is a risk of recognition of their entrepreneurial activities and collection of taxes from them as individual entrepreneurs. This bill introduces a definition of what mining is solely a business activity. The next step, as suggested by the Ministry of Finance, will address the issue of taxation.»
As for the people who namimili digital money before the adoption of the draft law «On digital of financial assets» and amendments to the Tax code, they will not be brought to tax. While lawyers refer to the impossibility of retroactivity of the law.
However, the full tax implications of the bill for natural and legal persons may be assessed only after the final determination of the civil legal status. But there may be options. For example, in Belarus, the cryptocurrency is a «quasi-thing» for civilian purposes, but for tax purposes is property rights.
Mikhail Uspensky: «It is important to remember that the tax consequences are significantly different for legal entities and for individuals, since we are talking about two different taxes: the corporate income tax and personal income tax. If the Russian legislator for tax purposes will listen to the logic of the Belarusian President, citizens may experience an unpleasant surprise. To date, Tax code, Chapter 23 personal income tax, does not allow to take into account fluctuations in the crypt. Simply put, have received bitcoin for 1 ruble and sold for a thousand, 13% will have to pay from 999 rubles».