The Russian finance ministry has submitted a bill to the Duma requiring of exchanges to follow KYC procedures and establishing a legal framework for cryptocurrencies in the country.
The Russian finance ministry has forwarded the so-called Digital Financial Assets bill to the State Duma, the lower house of the country’s parliament.
The legislative proposal attempts to define how cryptocurrencies fit into Russian law and to eliminate some of the uncertainties that have kept this particular sector at a stand-still.
The language of the bill indicates that it wishes to restrict trade between cryptocurrencies and Russian rubles.
Only operators licensed under the law of “Securities Market” are allowed to handle these assets.
“Operators of exchanges of digital financial assets can only be legal entities established in accordance with the law of the Russian Federation and carry out the types of activities defined in articles 3, 4, 5 of the Federal Law of April 22, 1996,” the bill reads.
Article 4 of the bill also requires exchange operators to follow the KYC legislation put in place for other financial institutions:
“A digital wallet may be opened by a digital exchange operator of financial assets only after passing the procedures for identifying its owner in accordance with the Federal Law ‘On Counteraction legislation (laundering) or proceeds from crime, and financing of terrorism.”
This puts Russian cryptocurrency exchange law on a par with the EU, whose memebrs came to an agreement in mid-December 2017 that would have exchanges ask for proof of identity from all their users.
Interestingly enough, the Russian bill does not require this of application developers that provide standalone wallets for cryptocurrency transactions.
The EU measures included provisions that would have wallet providers follow the same KYC procedures, with no clear indication as to how they will be able to enforce this within the continent’s borders given that people can just run full nodes as wallets.
If this bill passes, cryptocurrencies will have legal status in Russia, albeit a tenuous one.
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