Illegal Use Of Cryptocurrency Is Largely A Myth, Says Russian Legislator BlockBlog

Only a small portion of cryptocurrency transactions have illicit purposes and the use of digital coins in illegal activities is mostly a myth, a senior Russian lawmaker recently said. Andrey Lugovoy, who is one of the MPs working on new crypto regulations, also said that Russia can become a world leader in crypto mining.

Russian developers are working on software that detects “dirty” cryptocurrency

The illegal use of cryptocurrencies is largely a myth, according to Andrey Lugovoy, a member of the crypto regulation task force at the State Duma, the lower house of Russia’s parliament. “According to the largest crypto exchanges, no more than 4-6% of cryptocurrency revenue is involved in illegal activities,” the lawmaker told Parlamentskaya Gazeta.

Lugovoy, who is also vice-chairman of the security and anti-corruption committee, pointed out that there are effective tools to identify wallets used for illicit purposes, such as those offered by blockchain analysis companies Chainalysis. and Crystal. He added that Russian IT developers are also working on domestic software that can detect “dirty” cryptocurrency.

“According to experts, cash is used in illegal activities up to 11 to 13% of turnover,” notes the MP. He is convinced that the introduction of transparent crypto regulation in Russia, as well as the identification of users of digital currency, will allow the government to fight against concealment of income.

Illegal use of cryptocurrency is largely a myth, says Russian lawmaker
Andrei Lugovoy

This week, the parliamentary committee on financial markets approved amendments that will allow the taxation of operations with cryptocurrencies while the Ministry of Finance supported proposals by Russian law enforcement for the new law “On digital currency ”. Both pieces of legislation are expected to be passed during the Duma’s spring session to comprehensively regulate the Russian crypto space, along with the “Digital Financial Assets” law, which entered into force in early 2021.

Andrey Lugovoy has in previous statements rejected calls to impose a blanket ban on crypto-related activities in the Russian Federation. He now admits that there is a broad consensus among government institutions in Moscow that cryptocurrencies cannot be used for payments. Bitcoins and the like should be defined as property in the new legislation, he added in his recent interview.

At the same time, the Russian authorities do not plan to introduce restrictions on the ownership of crypto assets, the State Duma member stressed. However, cryptocurrency owners will likely be required to declare their digital holdings to the state.

The legislative changes also aim to bring millions of “grey” crypto miners out of the shadows, Lugovoy said. He highlighted Russia’s contribution to this market, with nearly 12% of the global bitcoin hashrate, and ranking third among mining destinations. Given the country’s cold climate and the surplus of low-cost electricity, Russia can become the world leader in the mining sector, the legislator explained.

Keywords in this story

Andrey Lugovoy, Crypto, crypto exchanges, crypto mining, crypto payments, crypto regulations, Cryptocurrencies, Cryptocurrency, Illegal Activities, Illegal Purposes, Legislator, Lugovoy, Mining, Payments, Regulations, Russia, Russian, State Duma

Do you expect Russia to adopt a crypto-friendly regulatory framework and reconsider its stance on crypto payments? Tell us in the comments section below.

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Lubomir Tassev

Lubomir Tassev is a tech-savvy Eastern European journalist who loves Hitchens’ quote: “Being a writer is who I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.

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Illegal Use Of Cryptocurrency Is Largely A Myth, Says Russian Legislator BlockBlog

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