Russia’s Finance Ministry is preparing a new bill that would impose fines and jail time for crypto investors who fail to properly disclose their holdings. 

According to a report by local news outlet Kommersant, the Russian Ministry of Finance is in the process of drafting a bill that would impose up to three years in jail for undeclared cryptocurrency wallets. 

The goal of the proposal is to force crypto-asset investors in the country to disclose their holdings for taxation purposes. Investors who receive more than 100,000 rubles ($1,300) of crypto-assets per year will be required to notify tax authorities and submit a report on their wallets.

In addition to prison time, violators of the new bill would face fines up to 30 percent of the amount received, with a minimum of 50,000 rubles ($650). 

Investors who fail to disclose over one million rubles ($13,000) in crypto-assets per year are at risk of receiving the harshest penalty, including three years of prison time or a community sentence. 

In addition to investors, foreign entities such as exchanges will be required to send quarterly reports on Russian cryptocurrency transactions to local tax authorities. 

Roman Yankovsky, a member of the Russian Lawyers’ Association division supporting digital economies, said the bill was largely overblown. Speaking with Kommersant, Yankovsky predicted that exchanges and other crypto businesses would ignore the broader provisions of the bill, saying “hardly anyone will take this position seriously.”

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