Clever Geek Handbook

Cryptocurrency ICO, IEO, STO. Mining Blockchain: regulation in Russia. Full story: 2014-2019





Prologue



A lawyer is a person who can write an answer to 10 sheets and call it short.


My main business is related to jurisprudence. Almost weekly, 1-2, or even 3-5-10, clients come who ask the same questions: “What is the status of cryptocurrencies / tokens in the Russian Federation / CIS?”; “What taxes are mining / crypto trading subject to?”; “How to put ASIC / cryptocurrency on balance?” Etc. I decided in several articles to state my position, based solely on practice, but it’s important to understand what it is based on, which in turn dictates the following: familiarize yourself with the current standards and the trends laid down by the (conditional) legislator, executor and judge . Therefore, we will try to come from “ what was it?” To “so what is it?”: It will be useful not only for colleagues, but also for it-specialists, because questions arise more often from them. And yes, the second important problem to be solved is to increase the level of literacy : as it becomes clear at the end of the cycle of materials, over 10 years people have not learned anything but stamping the same myths and comments that make it and those around them worse. Finally, the third task: to create a free mini-directory on the legal issues of the crypto industry (it’s easy to use: all periods are highlighted with a special heading bar). Similar solutions already exist, but they are: firstly, devoid of commenting; secondly, not complete; thirdly, in most cases they do not contain references to different positions and official documents).



The description for all years will be in the following format:



  1. Basic regulatory (regulatory) acts.
  2. Initiatives / projects.
  3. Arbitrage practice.
  4. Positive and negative results.






The regulatory framework of the first period:



  1. Information letter (!) Of the Central Bank of the Russian Federation, more precisely - its press service , dated 01/27/14 "On use in transactions ...". The letter does not (!) Have legal force. The analysis is more detailed see on Habré
  2. After the meeting in the RF GP on 02/06/14 , an information message was published from Rosfinmonitoring “On the use of cryptocurrencies” with a message similar to a letter from the Central Bank. More details about the prohibitions are in the analytical report .


Initiatives:



  1. A meeting of the FSB, the Ministry of Internal Affairs, the prosecutor’s office and other law enforcement agencies was held at the Prosecutor General’s Office (02/06/14), at which, in particular, the issues of “the legality of using anonymous payment systems and cryptocurrencies” were discussed, although the concept of a payment system at that time was recorded in Federal Law No. 161 and it was clearly not about him. The main aspect of the discredit was clear: as D. Assange correctly noted, it is always the four horsemen of the Apocalypse.
  2. The first, punitive , draft law (from 03.10.14) is currently not available for direct viewing: only in the web archive . And not in vain: this document contained a lot of inconsistencies and absurdities, testifying not only to the terrible legal technique, but also to the complete incompetence of the people who make it up. Perhaps the most critical moment is the introduction of penalties for “mining money substitutes.” Despite the fact that the very concept of the latter and its content have not been worked out. For a more detailed analysis of the bill, see the article .
  3. It was not for nothing that already in December 2014 the Ministry of Economic Development criticized this project as bankrupt : first of all, because loyalty programs fell under the definition of money substitutes, as well as a number of other legal phenomena, which clearly violated the work of all (!) Private business in the Russian Federation.


Judicial and other practice:



  1. Blocking an online store.
  2. The two most famous (at that time) locks from Roskomnadzor.
  3. Actually, the Decision of the Nevyansk City Court of the Sverdlovsk Region (attention, access to Slideshare is also limited without vpn!) Dated 09/30/14 on blocking 7 Internet resources on Bitcoin cryptocurrency: bitcoin.org, indacoin.com, coinspot.ru, hasbitcoin.ru, bitcoinconf.ru, bitcoin.it, btcsec.com. Detailed case analysis . Interestingly, in 2019, coinspot was again blocked after unlocking in 2015.






Initiatives:



  1. The bill on the prohibition of cryptocurrency on the territory of the Russian Federation under the threat of administrative and / or criminal punishment. As usual - the original is not available (and even access to expert comments is blocked). And this despite the general message - “allow crypto assets”.
  2. You can learn more about opinions on the development of taboo laws on Habré.
  3. A working group has been created under the Central Bank of the Russian Federation to develop draft laws in this area (in my opinion, the most ineffective of all).


Arbitrage practice



  1. Btc-e lock
  2. Blocking multiple sites at once.
  3. Cancellation of the decision on locks 2014 (see also on Habré the crack analysis).
  4. Decision 2-10750 / 15 of 11/10/2015 - a short list to it: see in the consolidated material .
  5. Case files on the 2015 locks.
  6. Cancellation of decisions on blocking "cryptocurrency sites" in the regional court (Ekaterinburg).
  7. And, of course, a demonstration court on Kolionovo (with constant continuation ).






Normative acts:



  1. Letter of the Federal Tax Service of the Russian Federation of 03.10.16 , the main conclusions of which are: there are no concepts of “money substitute”, “cryptocurrency” in the legislation; citizens are not forbidden to use crypto assets and there are no grounds for taxing such operations. All definitions are characterized by an extreme degree of abstraction. Commentary on the importance of this document from the participants of the Big Four .


Initiatives:



  1. 2016 promise that the draft cryptocurrency law "will be until the fall": see here . However, the heated debate delayed him (and much ).
  2. The Ministry of Finance, as always, decided to tighten measures and made an attempt to impose sentences of up to 7 years (!) In prison "for the release of monetary surrogates." For comparison: Art. 264 of the Criminal Code provides for a much milder sentence, although no one has died from cryptocurrencies, but the death rate on the roads is tens of thousands of people.
  3. Bitcoin == foreign currency? Another, very strange initiative of the Ministry of Finance, which not only contradicts the logic stated in the letter of the Federal Tax Service above, but also the very essence of the cryptocurrency, which even SEC spoke in a more right direction .


Arbitrage practice:



  1. Vyborgsky District Court of St. Petersburg dated July 18, 2016 (case No. 2-10119 / 2016). Analysis on Habré .
  2. The Vyborgsky District Court of St. Petersburg banned (as it later turns out - groundlessly) cryptocurrency sites.
  3. The Primorsky District Court of St. Petersburg by decision in the case No. 2-10224 / 16 of 05.07.2016 blocked Localbitcoins.
  4. Decision in case No. 2-10730 / 2016 was blocked by the ecmo.com exchange
  5. Sentence of the Leninsky District Court of Chelyabinsk dated June 6, 2016, case No. 1-311 / 2016
  6. Primorsky District Court. St. Petersburg. Decision No. 2-10936 / 2016 of 06.16.2016.
  7. The determination of the Tyumen Oblast Arbitration Court of June 22, 2016 in case No.A70-15360 / 2015: taking loans through cryptocurrency is (!?) Unscrupulous behavior (as usual - the source is not available: the main part of the decision can be found here ).
  8. The decision of the Ryazhsky district court of the Ryazan region No 2-160 / 2017 2-160 / 2017 ~ M-129/2017 M-129/2017 in the case of the exchange of "virtual currency". The main conclusion: “practically in the Russian Federation there is no legal basis for regulating payments made in“ virtual currency ”, in particular, Bitcoin, and there is no legal regulation of trading Internet sites, bitcoin exchanges, all operations with the transfer of bitcoins is carried out by their owners at their own risk. ”
  9. Analysis of solutions with the opposite position can be found in this material .
  10. The determination of the Arbitration Court of the Vologda Region of October 6, 2016

    in the case No13-3814 / 2016.
  11. Resolution in the case No. A73-6112 / 2015 of 06/28/2016. 6th AAS, where it was stated: “the reasons for the return by agreement of the money received by him under the loan agreement

    funds, but not in the form of cash received $ 5 million, but in the form

    cryptocurrencies (virtual money) are evaluated critically, as they do not confirm the fact of payment of money to the defendant ”(see also case No. 73-6112 / 2015).
  12. Decision of the Intellectual Property Court No.IP-368/2016 of 09/07/2016: refusal to register the Bitcoin trademark .
  13. Decision of the Anapa City Court on blocking the criptonit website No. 2-869 / 2016 2-869 / 2016 ~ M-391/2016 M-391/2016 of February 25, 2016 in case No. 2-869 / 2016.
  14. The analysis of locks on Habré.






Normative base:



  1. The Central Bank of the Russian Federation on 04.09.17, just before the height of the ICO hype, issued another “information letter” that talked about Initial Coin Offering and how all this could lead to “financial losses for citizens and to the inability to protect consumer rights”. But the Central Bank did not mention that Cashbury , the largest pyramid since the time of MMM, had licenses from this regulator, just like millions of one-day firms have and had accounts in banks controlled by the Central Bank of the Russian Federation.
  2. Letter of the Ministry of Finance of the Russian Federation dated 02.10.2017 No. 03-11-11 / 63996 on the general legal status of crypto assets.
  3. Letter of the Ministry of Finance of the Russian Federation dated October 13, 2017 No. 03-04-05 / 66994 about the payment of taxes from cryptocurrencies (and comments thereto).


Initiative:



  1. It all started with the List of Instructions from the President of the Russian Federation on 10.21.17.
  2. Another, hitherto failed, initiative of the head of the Ministry of Finance.
  3. In June of the same year, the following statement was already made by the same Mr. Moiseyev : now cryptocurrencies wanted to be recognized as “other property”.
  4. The Central Bank also decided to regulate the scope of ICO (see above).


Arbitrage practice:



  1. Case on the site bitcoininfo.ru.
  2. A number of cases in perspective and retrospective from Roskomsvoboda.
  3. The verdict of the Abakan city court of the Republic of Khakassia of May 10, 2017 in case No. 1-254 / 2017 (here and up to the point “Sentence of Vologodsky ...” the list was compiled on the basis of a scientific article : all cases could not be verified).
  4. Sentence of the Yoshkar-Ola City Court of the Mari El Republic of June 01, 2017 (case No. 1-233 / 2017).
  5. Sentence of the Soviet District Court of Omsk of May 19, 2017 (case No. 1-232 / 2017).
  6. Sentence of the Vologda City Court of the Vologda Region of May 15, 2017 (case No. 1-461 / 2017).
  7. The prosecutor's office of Krasnoyarsk and the ban on the sale of au.ru.
  8. The prosecutor's office of Novosibirsk and the ban on the sale of cryptocurrencies with reference to the Federal Law No. 115 .
  9. Sentence No 1-143 / 2017 of December 26, 2017 in the case No1-143 / 2017 of the Dubna City Court.
  10. Sentence No. 1-191 / 2017 of April 21, 2017 in the case No. 1-191 / 2017 of Leninsky

    District Court. Tomsk.
  11. Sentence of the Kuibyshevsky District Court of Samara on January 24, 2018 in the case No. 1-27 / 2018 (1-300 / 2017).
  12. However, the practice of criminal and administrative legal proceedings is extensive only because in the endless stream of ordinary fraudulent actions, cryptocurrency frauds are allocated by the media , but their content in the total volume, as will be described in the next article, is not even 1%.
  13. The Oktyabrsky District Court of the city of Saransk of the Republic of Mordovia, the decision in the case No. 1-301 / 2017 of 12/08/17 is one of the most indicative in this sense.
  14. And, of course, the LavkaLavka case, which, incidentally, won it, which did not help the business .






Normative acts:



  1. Letter of the Department of Tax and Customs Policy of the Ministry of Finance of the Russian Federation of 08/28/2018 No. 03-03-06 / 1/61152.
  2. Letter of the Department of Tax and Customs Policy of the Ministry of Finance of the Russian Federation of 08.16.2018 No. 03-03-06 / 1/58171.
  3. Similar findings are contained in the Letter dated 14.06.2018 No. 03-03-06 / 1/40729.
  4. And also in the Letter dated 02/09/2018 No. 03-03-06 / 1/8061.
  5. And the Letter dated 05/17/2018 No. 03-04-07 / 33234.
  6. Letter of the RF Ministry of Finance No. 03-03-06 / 1/8061 with Deloitte's comments.
  7. Letter dated 05.17.18 of the Ministry of Finance of the Russian Federation No. 03-04-07 / 33234
  8. FATF recommendations for Rosfinmonitoring implementation.
  9. Ministry of Economic Relations and ICO Opinion
  10. A complete analysis of all letters of the Ministry of Finance on cryptocurrencies.


Initiatives:



  1. By January 25, 18, the famous project “On Digital Financial Assets” (hereinafter - the Federal Law on CFA ) appeared, which survived several editions (a brief but emotional analysis of the first and its addition ): initially, CFA was understood as a cryptocurrency and a token that differed only among themselves issuer. Perhaps the most important drawback of the project was the provisions on how tokens in the Russian Federation should be issued: for this you need to obtain permits (licenses), as well as use several intermediary sites, that is, all the ICO / tokenization salt as such has disappeared. Perhaps the only pluses of the original edition were the allocation (as suggested) of home mining and industrial (in terms of power consumption: up to 15 kW and after) and the introduction of the term “smart contract” (see also ).
  2. The draft Federal Law from the Central Bank of the Russian Federation “On Alternative Methods ...” has been removed from the site and is available only in the form of a cache copy or on another official resource: but in its entirety (date - 01/28/18). In the same law, the Achilles' heel is not only a restriction on issuers, but also on the amount of entry for an investor: up to 50,000 rubles. private individuals (in 2019 - an increase of up to 100,000 is possible). “Easier than nothing,” is perhaps the best description of what is happening. You can also study the official response of the Government of the Russian Federation to this project.
  3. A bill was also introduced on the basis of the deputy initiative: “On the system of distributed national mining.” An assessment of this and two previous projects can also be found on the Roskomsvoboda website .
  4. The first reading on all three laws took place (and successfully) in May 2018 . Explanation by A. Aksakov . Although the dispute between the ministries did not subside.
  5. Once again, when a statement was received that “the law is about to be adopted,” it was just the 5th month of 2018 . The Ministry of Finance did not stop at this point and proposed introducing ( again ) criminal liability for the exchange, but this time the Ministry of Economic Development refused to make corrections.
  6. The main blow was directed at the most understandable (for officials) area - mining : despite the difficulties with the category itself, even RACIB decided to certify this direction (however, RACIB also had many plans for ICOs ). However, the legal technique didn’t get any better from this, and the miners themselves decided “not to provide any tax benefits”.
  7. In the meantime, the Central Bank of the Russian Federation conducted a test ICO , which, however, cannot be called such from a global perspective (including due to restrictions on attracted funds and certification ), and at the same time recalled that “cryptocurrencies are not a legal means of payment in the Russian Federation.” Sberbank - too ; and the head of the Ministry of Finance reported on the positive aspect of this type of crowdfunding.
  8. In May 2018, another project was proposed “On the circulation of digital rights in the financial sector and on amendments to certain legislative acts of the Russian Federation”.
  9. However, already in June, the bills were again delayed : this time - until the fall of 2018. One version of why this happened was expressed by different experts at different levels.
  10. In the autumn, the RSPP asked to finalize the "cryptocurrency bill."
  11. In total, by the end of 2018, there were up to 9 projects (!), Which at the same time did not cover 2/3 of the blockchain / cryptocurrency industry.


Arbitrage practice:



  1. The Zavod.Coin Case and its sequel .
  2. The most important is the Decision of the Armed Forces of the Russian Federation of April 20, 18 ( official link ): as a result of its adoption, one of the most famous (and unfair) cases regarding websites working in one form or another with cryptocurrencies was canceled: during this process, the answer was given from RACIB to a lawyer's request regarding the status of cryptocurrencies. At the same time, the initial decision of the Vyborgsky district court on the offsite is not available today . This judicial act should be recognized as one of the most significant in the industry today, despite the fact that "the court evaded the issue of determining the legal status of cryptocurrencies and considered only procedural violations." A brief chronology can also be studied on the TASS website.
  3. The decision of the Kuibyshevsky district court of July 24, 18: on blocking bestchange.ru, fastobmen.net, pushpayer.com, xchange.cash. The court indicated in the reasoning that: “the“ electronic currency ”of Bitcoin (Bitcoin) is a virtual means of payment and accumulation (a text sequence consisting of letters of the Latin alphabet and numbers)”, although according to the Federal Law No. 161 “On the National Payment System” A completely different category is recognized as electronic money ( see paragraph 18 of article 3 of this law ), the CBR in 2014 used the term “virtual currencies”, and in 2017 specified it with the word “cryptocurrencies”. Later this decision, which recognized the information of these sites “prohibited for distribution on the territory of the Russian Federation,” and the sites included in the “Unified Register of Domain Names ...” was canceled (see also ). The appeal was dealt with by the famous Khabrovite citizen - sardarbinyan , more about this in his material .
  4. The case of the Kostroma court , which allegedly issued a decision on a crypto-exchanger , but in reality it all boiled down to completely banal operations to launder the most common fiat funds, stands apart.
  5. Appeal ruling of the Moscow City Court of March 26, 2018 in case No. 33a-2103/2018.
  6. Decision of the Moscow City Court of April 18, 2018 No. 7-4313 / 2018
  7. Perhaps, one more, the most important, decision is the Ninth Arbitration Court of Appeal in Decree dated 15.05.2018 No. 09-16416/2018 in case No. 40-124668 / 2017, where for the first time the debtor was obliged to transfer crypto assets: “oblige ... to transfer to the financial manager access to crypto-wallet (pass the password) to replenish the bankruptcy estate ”.
  8. Appeal ruling of the Ulyanovsk Regional Court of July 31, 2018 in case No. 33-3142 / 2018.
  9. Appeal ruling of the Supreme Court of the Udmurt Republic dated 12/26/2018 in the case No. 33-5664 / 18 regarding mining not for “domestic (own) needs”
  10. The decision of the Oktyabrsky District Court of Novosibirsk dated 12.24.2018 in the case No. 2-4803 / 2018 - also on mining issues.
  11. Appeal ruling of the St. Petersburg City Court of September 17, 2018 in case No. 2-1781 / 2018 on why “home” mining is possible.
  12. The decision of the Arbitration Court of the Irkutsk Region of 05.2018 in the case No. A19-15918 / 2017 (mining).






Normative acts:



  1. The main achievement is the entry into force of the Federal Law "On Digital Rights" (a comment on Habré ): in fact, tiny amendments to the articles of the Civil Code of the Russian Federation , which we will definitely consider in the following material: first of all, 141.1 of the Civil Code of the Russian Federation .
  2. You can read more about the positions regarding innovations in the consolidated material from RBC: all the more so since all the main gaps are disassembled in it.
  3. Despite the obvious lag of Russian legislation from international practice, especially from the evolution of the crypto assets themselves, the Ministry of Finance on September 26 , 19 issued another Letter on how to pay taxes on these assets.


Initiatives:



  1. Perhaps Russia, as a member of the BRICS, will introduce a unified state (!?) Cryptocurrency (or even its own : in one form or another ).
  2. The Ministry of Internal Affairs again made a statement (this time not through the Ministry of Finance, but directly ) that it would develop a mechanism for searching and removing crypto assets.
  3. Perhaps the two previous paragraphs (as well as the general uncertainty for more than 5 (!) Years) forced Sberbank to abandon the creation of its own cryptocurrency.
  4. Perhaps, by the end of the current - the beginning of next year (as we can see from the materials of this article - this is quite real :)) amendments will appear that allow trading on "certified" crypto exchanges.
  5. A number of regions, meanwhile, are trying to take advantage of legal gaps and test the blockchain, and with it a number of other innovations .
  6. The cryptocurrencies themselves again (!) Decided to outlaw , but then create everything for the operation of “cryptocurrencies on closed blockchains” (!?), Because crypto assets “threaten the financial stability of the Russian Federation”.
  7. Perhaps new categories will appear soon: utilitarian digital law (Article 8 of the Federal Law of the Russian Federation dated 02.08.2019 N 259- “On attracting investments using investment platforms and on amending certain legislative acts of the Russian Federation”); digital financial asset ; digital certificate (Article 9 of the Federal Law No. 259); a digital operational sign , and, if you're lucky, then a cryptocurrency (in some other, more likely form in spelling and content) and even tokens of all stripes.


Judicial and other practice:



  1. For the first time, the tax agency agreed (conditionally) to include cryptocurrencies in the charter: comments .
  2. The Supreme Court followed the general practice of Russian state bodies and warned that money laundering through cryptocurrencies is punishable by law.


Brief conclusions: what will happen next?



  1. The most important conclusion for me is that a business that is awaiting regulation can be either large or flexible: 5 years have passed since the first initiative, and innovations will not be typed into 5 full sheets. The root cause of this is simple: government agencies listen to lawyers who are very indirectly related to the industry, and all “expert advice” and “working groups” work either in a formal way or lobbying the initiatives of the structures themselves.
  2. Despite constant promises of digitalization and the “need to regulate” cryptocurrencies, sites are still blocked .
  3. It can be designated as follows: firstly, the market does not believe the promises of the authorities, because it constantly violates them; secondly, the government itself is heterogeneous: what is beneficial to the Ministry of Economic Development is not beneficial (for some reason) to the Ministry of Finance (and vice versa ); what the Ministry of Finance itself is lobbying for does not accept the Central Bank; The State Duma of the Russian Federation should create its own expert council, because otherwise you have to listen to consultants from the Central Bank and other banks, the same Ministry of Finance (see their selection of materials ), etc. And not state players , in fact - they were created from its very bowels. About this - also in the analysis of the situation 2019-2020.
  4. Although the question of taxes has been raised more than once, there is no clear and even unified scheme today, but there are again contradictions: transactions are considered suspicious (because in Russia information letters from Rosfinmonitoring and the Central Bank are sometimes higher than the law), and pay taxes without making transactions and transactions are impossible.
  5. As will be shown in the 2nd and 3rd articles of the cycle, the one-sided presentation of the data also interferes, which essentially distorts the market statistics and gives it to the average man in a completely black, negative, light.
  6. As a result of such a “war of everyone with everyone,” Russia not only lost its leadership position in the ICO , but was also unable to attract new funds to the budget, including through taxes ( examples here too ).
  7. Among other things, most of the failed state initiatives. they quietly but methodically try to wipe the organs, thereby escaping due public resonance: for me, this is the best proof that for a blockchain that allows you to accurately find out information that was recorded once, this is the best approbation.


Thus, today the issue of mining , smart contracts (why in this category too - read next time) and DAO, there is no clear definition of DTL / blockchain, there is no legislative regulation of cryptocurrencies, as well as tokens in a broad sense ( ICO , IEO) - even more so: for today's day's scheme, see Roman_Yankovskiy ); the status of DEX exchanges is not clear and most importantly - there are no trends to improve the situation .Those norms that have been adopted are a logical continuation of Federal Law No. 161, that is, they create an artificial domestic market for non-competitive products: this will ultimately lead to the fact that the Russian Federation will be isolated from the common crypto assets market and will create all conditions for the degradation of its own. To do this, it is enough to study the experience of Qiwi, WebMoney, RBC.money, as well as small aggregators (Telemoney, Z-Payment and others) after the adoption of the Federal Law "On National ...". However, you are free to disagree with me.



Be that as it may, in the following parts I will try to tell you how things are today, where the world is moving, and most importantly - how to still work in the current conditions, without looking at statistics, statements and the general crisis state of business in the Russian Federation.



Before!



PS Quote : “The issue and circulation of cryptocurrencies cannot yet be resolved.”


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