Country overview

Russia still lacks transparent regulation of cryptocurrencies, but it is unofficially quite influential in this field. In addition, it has already imposed basic crypto regulation.

Russia's security level is a considerable danger in our rating. It has 61.3 points (from 100) for safety in Numbeo crime rating (1). The homicide level (2) is 6.8 per 100,000 inhabitants a year.

Crypto payments in Russia are officially prohibited based on federal law №259 “On digital financial assets” (3). The law was adopted on July 31, 2020. This law prohibits using cryptocurrencies as a means of payment on the territory of the Russian Federation.

At the same time, small and medium enterprises in Russia use crypto payments unofficially. Among other things, these solutions are used in foreign trade activities to circumvent sanctions (4).

The use of cryptocurrencies as a means of payment on the territory of the Russian Federation is prohibited. Therefore, payment of labor in cryptocurrencies, especially on an official basis, is not permitted.

However, there is a loophole in Russian legal practice, namely, if one citizen pays off with another citizen of the Russian Federation on the territory of another jurisdiction, and cryptocurrency is used for settlements not on the part of Russia. Still, between Russian citizens, then, it may be possible. However, as we said above, using crypto as a means of payment on Russian territory is prohibited. This means that Russian legal entities cannot legally use cryptocurrency to pay salaries.

Currently, in Russia, cryptocurrencies are regulated by the federal law №259 “On digital financial assets” (5). There is no such thing as cryptocurrencies in the law itself, but there is the concept of a “digital financial asset” and “digital currency.”

The law authorizes Russian citizens to hold digital currencies and clarifies the procedure for their taxation. Within the framework of this law, exchangers and exchanges cannot legally operate on the territory of the Russian Federation. All their activities and p2p exchanges are in the gray zone.

At the same time, there are dozens of foreign crypto exchanges and local crypto exchange points, many of which operate in Moscow openly. They exchange cryptocurrencies (USDT, BTC, ETH) for fiat (ruble, dollar, euro), including cash out. Also, it’s possible to deposit rubles on some exchanges through its offices.

In general, there are no legal crypto entities under the current law other than operators of digital financial assets (DFA) in Russia. Such companies issue various digital rights on the blockchain - for example, shares and bonds. In principle, such a license can be equated to security tokens and STO (security token offering license). From this point of view, crypto regulation in Russia is more transparent than in Turkey and other similar countries, where there is a market but no regulation.

You can find more information about the current status of digital financial assets in Russia and their regulation on the Bank of Russia site (6). Based on it, there are already 15 organizations that can issue digital financial assets (aka security tokens). The Moscow Exchange will become the first platform for listing DFA in 2024 (7), including real estate DFA (aka real estate security tokens).

The DFA Law regulates (8) the taxation of cryptocurrencies and promises Russians the protection of their property rights to cryptocurrency only when it is declared. If you receive income from the sale of digital assets, the tax base will be calculated as the difference between their purchase and sale prices.

1)Crime Index by Country 2023 Mid-Year

2)List of countries by intentional homicide rate

3 and 5)Federal Law "On digital financial assets, digital currency and amendments to certain legislative acts of the Russian Federation" dated July 31, 2020, N 259-FZ (latest edition). Russian version.

4) Russian founder of sanctioned exchange Garantex starts Tether desk. Article

6)Digital financial assets and their operators. Bank of Russia

7)Tokenized real estate to be issued on the Moscow Exchange in 2024. Article

8)Mining, trading, and taxes. How is the crypto market regulated in Russia? Article

9)Personal income tax (PIT). Federal Tax Service

10 and 11) Corporate Income Tax and Capital Gain Tax (CIT and CGT). Federal Tax Service