The Russian Ministry of Finance will create a register of cryptocurrency investors. People that own cryptocurrency will have to disclose their passport and taxpayer ID and pass certification to be able to invest in ICOs, Izvestia reported today, citing sources in the Ministry of Finance and the Bank of Russia.
Why it is important
- The binding of crypto wallets to passport data and Tax IDs will exclude the anonymity of calculations.
- According to experts, the regulation will make the Russian cryptocurrency sector more transparent, but it won’t apply to investments made on external exchanges.
The register will be controlled by the Central Bank or the Ministry of Finance. Anatoly Aksakov, chairman of the State Duma Financial Market Committee, explained that the identification of cryptocurrency investors will be introduced to curb money laundering. It is reported that the law has already received the backing of Russian Association of Cryptocurrency and Blockchain (RACIB).
"Regulatory authorities are rightly opposed to anonymity in ICOs, but that issue is now being solved by passing the KYC procedure (Know Your Customer - Ed.),” commented Yuri Pripachkin, RACIB President.
According to RACIB’s data, there are currently around 2 million cryptocurrency investors in Russia - the organisation estimates that those numbers will double by 2019.
“ICOs in Russia need to be regulated. Last year, Russian ICOs attracted $300 million, but most of the funds came from fraudulent schemes,” said Olga Prokhorova, an expert at the International Financial Center.
She followed by noting that the measure may have potential loopholes:"It is also unclear what the consequences will be for investors who are not present in the register. Most likely, they will not be allowed to participate in ICOs.”
Thailand has also announced a new law to control and regulate cryptocurrency transactions and ICOs. Violators of the law are threatened with heavy fines or imprisonment. Within three months, all citizens carrying out transactions with cryptocurrencies must register with Thailand's Security Exchange Commission (SEC).
By Nadya Astam