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Initially somewhat receptive to crypto and ICOs, Russia has begun to lead the way on crackdowns. This includes requiring prospectuses for ICO’s and that citizens will be able to buy and sell cryptocurrencies and tokens only through professional participants of the securities market.

Russia is located in Europe (non-EU): For the most part, European countries outside the EU have adopted a laissez-faire attitude to cryptocurrency regulation, driven strongly by Switzerland.

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Cryptocurrency trading in Russia

Russia has expressed a keen interest in coordinating and leading in regulation are cryptocurrencies and ICOs, including launching a national cryptocurrency called the cryptoruble.

In 2018 Russia revealed new regulations around cryptocurrencies covering a wide range of areas.

“Citizens of Russia will be able to buy and sell cryptocurrencies and tokens only through professional participants of the securities market,” Forbes Russia reported.

Operators of digital financial exchange entities can only be legal entities, and these must be “established in accordance with the legislation of the Russian Federation and carry out the types of activities specified in Articles 3 to 5 of Federal Law No. 39-FZ of April 22, 1996 ‘On the Securities Market’.”

They can also be “legal entities that are the organizers of trade in accordance with the Federal Law of November 21, 2011 No. 325-FZ ‘On Organized Trading’.”

The document also puts restrictions on wallets, noting that now a wallet must be “opened by the operator of exchange of digital financial assets only after passing the procedures of identification of its owner in accordance with the Federal Law of August 7, 2001.”

Regulation of ICOs in Russia

The recent regulations also extend to ICOs, stating that each ICO must provide an investment memorandum containing all information related to the issuer and the tokens to the government and public:

“An offer for the release of tokens, an investment memorandum, rules for keeping the register of digital transactions, as well as other documents…must be published no later than 3 working days before specified in the offer for the release of tokens.”

It also halts offering tokens to potential purchasers through advertising or other means prior to the publication of an offer for the release of tokens. Finally it restricts investments that can be made by non-qualified investors, to less than 50,000 rubles.

Cryptocurrency markets in Russia

While previously a somewhat fostering environment for ICOs, these regulations are sure to provide some ICOs pause, through the country does seem interested in further pursuing ICOs.

IBC’s planning and strategy team can provide expert advice on ICOs in different jurisdictions. If you’re thinking of holding an ICO in COUNTRY and you’d like more information, contact us here.