Russia is currently working on a regulatory framework to legalize Initial Coin Offerings (ICOs), local publications reported on Wednesday. This is in addition to a bill that is being finalized to recognize cryptocurrencies such as bitcoin and ether.
Also read: Russian President Vladimir Putin Discusses Using Ethereum with Vitalik Buterin
Amending Law to Recognize ICOs
Russian lawmakers are working on amendments to the civil law aimed at legalizing ICOs, according to Vedomosti, one of Russia’s largest newspapers. Discussion of the amendments has already begun by an interdepartmental working group under the State Duma, which has been assessing the risks of cryptocurrency use in the nation.
An associate criminal law professor at the Moscow State Institute of International Relations (MGIMO), Elina Sidorenko, heads the working group. “The group includes representatives from the Parliament, including the initiative’s originator Andrei Lugovoi. We also cooperate with other parliamentary committees,” she told Forklog in an interview published on Tuesday. “Aside from that, there are representatives from the central bank and the financial monitoring service.”
The Need to Regulate ICOs
According to Konstantin Vinogradov, Senior Associate at Runa Capital, there were more than 150 ICOs globally in the past year, which totaled more than $500 million.
Sidorenko explained that “legislative gaps exist which do not allow legal settlement of crowdfunding issues and ICO contracts,” according to Russian 360tv which also reported her saying:
The State Duma should undertake the development of legal mechanisms that would allow the verification of such contracts. They should also be designed to identify users and protect the rights of the holders of tokens to fulfill the obligations of issuing companies.
ICOs require investors to use certain cryptocurrencies, typically ether and bitcoin, in order to invest in their projects. The legalization of cryptocurrency in Russia can help large companies and small businesses that need investors, Vesti Finance reported market participants saying. “If the law is to allow the minimum cost of cryptocurrency transactions in Russia, this step will be the springboard for the takeoff of the Russian economy,” the publication wrote.
“Cryptocurrency Bill” Being Finalized
The working group has also been working on a bill to provide a legal framework for cryptocurrencies including bitcoin and ether in Russia. “The bill’s text is currently being finalized. When it’s done, it will be submitted to all departments,” Sidorenko told Forklog.
Early this month, Russian politician and the Presidential Commissioner for Entrepreneurs’ Rights Boris Titov proposed for the country to follow Japan’s lead and legalize bitcoin. Sidorenko echoed this sentiment, telling the publication that “our task now is to give some confidence to the market players and take the Japanese path.” She then described:
The bill will be a framework. Therein, we define the nature of cryptocurrencies and their status, as well as basic principles for the cryptomarket operation. Other provisions will be mostly referential. We don’t try to create an enormous and viscous law that defines all parameters of a new market right away. Creating such a law would just hinder the market.
The topic of cryptocurrencies has frequently been in Russian media recently. In June, President Vladimir Putin met with Ethereum creator Vitalik Buterin. “The conversation was held following the President’s meeting with heads of major foreign companies and business associations,” Putin’s official website states, adding that “Mr. Buterin described the opportunities for using the technologies he developed in Russia.”
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