Russia Going To Require All Crypto Wallets To Be Disclosed?

in LeoFinancelast month (edited)

Russia tightens regulation

The Russian Ministry of Finance has proposed a bill that would require all cryptocurrency wallet owners to declare all addresses to the authorities that have had at least 100,000 rubles worth of received transactions in the course of a year. The penalty carried by failure to report having received at least a million rubles is up to three years in prison. In case one discloses one's holdings, questions will follow as to how the funds were acquired and whether all the taxes have been paid.

In early September, the Russian Ministry of Finance has also proposed a ban on all cryptocurrency transactions except in cases of inheritance, bankruptcy and enforcement proceedings. Earlier, President Putin had signed into a law a bill that prohibits the use of virtual currencies to pay for goods and services in the Russian Federation. The law will take effect on January 1 2021.

Source: Минфин предложил ужесточить регулирование криптовалют в России

Will other governments follow?

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I found out about this as I was reading NewsBTC.com where there was an article written by Tony Spilotro. In the article, Spilotro expressed concern that if the bill is passed into a law, other governments will follow Russia's example.

Governments already have radically different approaches

I think that while a fear of stifling regulation becoming increasingly commonplace is not unfounded at all, it should be noted that there are significant differences between the approaches different governments have taken towards the space. Also, it should be noted that what the law in general means in a country like Russia is something quite different from what it means in the West. Since the beginning, the Russian legal system and the Russian bureaucracy have deliberately been built into a minefield where no business can survive total compliance of all the regulations in place. This is to guarantee the bribe-taking bureaucrats a living. There is no rule of law. It's a matter of who can do what to whom.

Russia wouldn't be the first country to pass draconian regulation of cryptocurrencies. Bangladesh, for instance, has completely outlawed cryptocurrencies in 2017. I think that different national governments and super-national entities will continue to radically differ in their approaches to cryptocurrency.

How to protect the space

@taskmaster4450 has put forward the idea that accelerating tokenization is a good thing because it has potential to put crypto-tokens into the hands of a much larger number of people world wide. That has the effect of creating a large number of people with an interest in protecting their wealth. In democratic countries, a large number of holders would act as a deterrence for politicians as they would not want to alienate potential voters as easily. Perhaps more importantly in most parts of the world, enforcing regulations will be much tougher is if the number of people subject to enforcement is much larger.

Implications for Russian Hive Users

I think it goes without saying that if you live in Russia, it is safer to be anonymous as a Hive user and not disclose too much in the way of personal information in your blog.

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Prison sounds scary, while not exactly easy to identify a crypto user that would certainly not bemefit faster adoption. If you can't win with inteligence then you can resort to pure display of violent power.

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I have to wonder why the Russian government is cracking down so hard on cryptocurrencies. I think the most likely answer is that the government thinks cryptocurrencies could be used to fund the activities of the opposition. This has absolutely nothing to do with curbing money laundering or fighting crime. It is well-known that Russian oligarchs have transferred trillions of dollars worth of their money, much of it gained through corruption, to overseas financial institutions to be laundered there and to end up in their bank accounts in tax havens.

Totally agree. When given a thought that seems the only reasonable explanation. They do not want any kind of forces to go under their radar i guess. And force and power is almost always associated with the wealth. So they want to keep control of it and i am sure they know more than we do.

I believe your explanation might be straight to the point.

There is an author on Quora called Dima Vorobyev who used to work as a propaganda executive during the Soviet times. After the fall of the Soviet Union, he went into marketing.

Vorobyev is a brilliant writer whose thesis is that the Russian civilization is a European project of colonization and extraction of the Eurasian continent. For as long as Russia has existed, it has only properly functioned when ruled by a strong centralized state controlled by an elite. All other times have only seen chaos, deep insecurity and hunger. This view of Russia explains the paradox that rulers like Stalin are so popular in Russia despite the fact that Stalin killed more Russians than Hitler.

Stability and the absence of total lawlessness and constant drive-by shootings in the middle of the day like in the 1990's but without a concentration camp system in place is something that, historically speaking, Russians should be happy for. In that sense, particularly the high oil price fueled bonanza of 2000-2014 when Russians enjoyed stability and a constantly rising standard of living under president Putin was an exceptionally good period in Russian history. Now that the standard of living is no longer rising, there seems to be growing resentment in the population. The government is doing what it can to try and quell all resistance. Putin is a former spy. He's going to use the most subtly effective and carefully calculated measures he can. The crackdown on crypto is part of that.

The part of that history is well known to me, since i am from Lithuania myself, a country occupied by Soviet Union after WW2.

I wonder if Puting himself HODL's Bitcoin :D

I wouldn't be surprised if Putin or some in his circle hadn't dabbled in crypto as well. At some point, Putin was interested in the potential of crypto. He invited Vitalik Buterin to the Kremlin to talk about them some years ago.

More reason to use Monero

If you're in Russia you're going to want to ditch Windows/macOS, install Linux, and learn how to use Tor. Get everyone you know to do so as well. Make it as hard as possible for anyone else to track online activities for anyone. They can't crack down on everyone.

It would be nice to see ring signatures implemented in Hive. Maybe by having a third type of Hive that implements all of Monero's privacy features, Privacy Hive or something.

Privacy needs to be the default, not an afterthought.

Interesting thoughts. Increased privacy measures are definitely a good idea.

As for a privacy-oriented Hive, I'm afraid one of the drawbacks of that idea is that it would be impossible to do anything about reward pool abuse if all transactions done with the Active key were private. Making everything private would make no sense because this is a publishing platform.

You could encrypt everything and make your posts readable only to those in possession with right keys. But once one of those encryption keys leak, everything will be readable for all eternity because of the immutability of all Hive content.

The only way to completely cover your tracks on Hive is to use an anonymous account and a front end that communicates directly with the RPC nodes from an IP address that cannot be traced back to you.

I spent around 40 minutes typing out a reply and then eSteem crashed and I don't feel like typing the entire thing out again, so here's a condensed version.

My suggestion was only to introduce another currency to Hive that features private transactions, just as we have Hive Backed Dollars, Hive, and Hive Power, we could have Private Hive as well.

It would take a significant amount of work, and likely wouldn't get done any time soon given that we have other unfinished features, mostly left over from the old blockchain, such as reset accounts. It would have potential to increase the usage of Hive for regular non-Hive related transactions though.

Speaking of reset accounts, it would be nice for them to actually be fully implemented and enabled. It lets you set an account you trust to inherit your own account after 60 days of inactivity, essentially giving you a way to get your account back if you lose your keys, or for someone you trust to be able to use your funds in the event you're dead or incapacitated for over 2 months.

Anyway, for now, the easiest way to do private transactions is to exchange Hive for Monero and then use said Monero.

I spent around 40 minutes typing out a reply and then eSteem crashed and I don't feel like typing the entire thing out again, so here's a condensed version.

I know the feeling ...

My suggestion was only to introduce another currency to Hive that features private transactions, just as we have Hive Backed Dollars, Hive, and Hive Power, we could have Private Hive as well.

That's an interesting idea.

It would take a significant amount of work, and likely wouldn't get done any time soon given that we have other unfinished features, mostly left over from the old blockchain, such as reset accounts. It would have potential to increase the usage of Hive for regular non-Hive related transactions though.

True.

Speaking of reset accounts, it would be nice for them to actually be fully implemented and enabled. It lets you set an account you trust to inherit your own account after 60 days of inactivity, essentially giving you a way to get your account back if you lose your keys, or for someone you trust to be able to use your funds in the event you're dead or incapacitated for over 2 months.

I agree. Currently, there is no way to regain access to your account if you lose access to your keys permanently.

Anyway, for now, the easiest way to do private transactions is to exchange Hive for Monero and then use said Monero.

Monetary transactions, yes. That's cumbersome.