Russian lawmakers have reportedly removed the section that defines cryptocurrency mining from the country’s draft bill on digital asset regulations.
According to a local news outlet, the Interfax, the crypto-related bill’s next reading, or review, in the State Duma may now fail to clearly specify how Russian citizens are expected to file taxes on their earnings from mining.
Anatoly Aksakov, the chairman of the State Duma Committee on Financial Markets, explained why he thinks the Russian lawmakers have removed the term mining from Russia’s crypto regulations draft. Aksakov noted:
Earlier we had some thoughts on Bitcoins, on their integration into our economic system. But as we decided we don’t need them, these ambiguous Bitcoins, therefore we don’t need mining as well.
Mining Is "Senseless"
The seasoned Russian politician added that if a legal framework, or guidelines, for mining are to be developed, then they will also require that lawmakers define, or categorize, crypto assets. However, Aksakov thinks this is “senseless” as mining is not a legitimate business or industry.
If/when required, Russia’s tax authority will specify how to report taxable income from cryptocurrency mining, Aksakov noted.
It is currently unclear whether Russia’s bill still includes sections that formally define crypto tokens and initial coin offerings (ICO). It is also not clear at press time if the initial draft has any proposed rules in place regarding the operations of cryptocurrency exchanges.
The current version of the proposed crypto bill will now be officially reviewed in the Duma for the second time. Russian lawmakers refer to the crypto-related bill as “Digital Financial Assets” and first introduced it in January of 2018.
"Cryptocurrency" Removed From Bill In May
In March, a group of lawmakers from the Russian Ministry of Finance proposed adding a section on anti-money laundering (AML) and know-your-customer (KYC) guidelines to the bill - which has now become almost a standard requirement in the US.
In May, a basic draft of the crypto bill had been approved by the State Duma, however, the definition of “cryptocurrency” was removed by lawmakers before the (next) autumn session. At the time, mining was still included in the bill and defined as the “release of tokens to attract investment in capital.”
In September, lobbyists from the Russian Union of Industrialists and Entrepreneurs (RSPP) began preparing their own version of the cryptocurrency regulation bill. Elina Sidorenko, the vice president of RSPP, explained that the bill had categorized crypto assets into three distinct groups, in order to bring more clarity as the bill presented in the State Duma was considered to be “unfinished and unfragmented.”