Bitcoin Gambling in Russia Could Turn Harder With New Legislative Proposals

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For years now, the Russian Federation has been toying with a number of ideas when it comes to regulating digital currencies in the country. Nevertheless, all the while local punters have been using cryptocurrencies to play online and even win big jackpot prizes at Bitcoin casinos. But according to the latest reports coming from local news sources, using Bitcoin may become more difficult in Russia than it ever was.

Unregistered Crypto Trading to Become Criminalized

According to reports from local news agency Izvestia, Russia’s Ministry of Interior Affairs is working on a new amendment to the country’s upcoming cryptocurrency legislation. This new amendment will reportedly aim to legalize only operations dealing with open source cryptocurrencies like Bitcoin but also ones that are registered with the local authorities.

According to the newspaper, in order for a transaction to be considered legal, any person or business should obtain a “mandatory registration” with authorities of the state that regulate the financial and taxation sector. Reportedly, the idea stemmed from the Ministry’s GUKON department (Main Directorate for Drugs Control), the head of which, Andrey Khrapov, has already requested that the Finance Ministry express its views on the newly proposed amendment.

As reported, the MED (Ministry of Economic Development) has voiced its skepticism on the amendment, saying it is early to start working on criminalizing cryptocurrency operations since there is technically no law that addresses the regulation of cryptocurrency transactions in effect. Still, MED’s deputy chief, Savva Shipov, stressed that locals could nevertheless be prosecuted if caught using cryptocurrencies for activities that were officially proclaimed illegal, like weapons trading, drug purchases, or online gambling.

New KYC Regulations to Set Tighter Limits

Another change proposed by Khrapov is to introduce tighter Know Your Customer (KYC) rules for cryptocurrency businesses. According to reports, the GUKON head is asking for any transactions surpassing 600,000 rubles (approximately $8,800 ) to be reported to the Russian authorities with included data about both the transfer as well as the individual conducting the transfer. This proposal is also supported by the Finance Ministry but not all state officials are convinced about it.

Thus far, the use of cryptocurrencies in Russia has been a grey area. For years, casino players in the country that wanted to escape local online gambling restrictions have resorted to using Bitcoin to play online, although not all Bitcoin transactions with online operators were used for gambling. But should things go in the way currently imagined by GUKON, trading and using cryptocurrencies could end up being criminalized, which will subsequently affect both the local gaming scene as well as the crypto industry.

If such a goal was realized, it is very likely that cryptocurrency-related startups and businesses will start looking for other jurisdictions to set up shop in while a high number of punters may forego using cryptocurrencies altogether.  Nevertheless, even only with the upcoming legislation, which was approved in 1 out of 3 readings in the Duma (parliament), Bitcoin is still considered an illegal “money substitute”, i.e. payment method in the country.

 

August 29, 2018: • No Comments

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