Russia is ready to present a set of guidelines in order to regulate Initial Coin Offerings (ICOs) in the country. The guidelines have been prepared by Russia’s Ministry of Telecom and mass Communications (MinComSvyaz) and are closely related to the Russian ruble.
Initial Coin Offering Regulations in Russia
Cryptocurrencies and ICOs around the world are being regulated by local governments and authorities, and Russia is not the exception. They can be stricter or friendlier towards the virtual currency environment, but governments want to have clear regulations and rules. As Initial Coin Offerings grow in popularity, Russia is trying to integrate the ruble, its national currency, to enterprises that carry out ICOs.
According to the news source Kommersant, the document that the MinComSvyaz presented is still being discussed. As the document explains, Initial Coin Offering organizers will have to get an accreditation to operate in the country that would last 5 years. The accreditation should be voluntary and would be controlled and regulated by the MinComSvyaz. In order to operate, the ICOs must be registered in the Russian Federation and they should have a registered capital of at least 100 million rubles (20535508 ZAR). Additionally, the company or team should have a bank account in Russia so as to transmit the money that was raised during the ICO phase.
The document explains that the regulations would be enforced by licensed companies that are accredited by the MinComSvyaz. As cryptocurrencies expand, regulations should be implemented in order to have the market under control. Most of the ICOs are trying to settle their operations in countries that offer clear regulatory frameworks but do not scare away start-ups. Two countries that offer these kind of regulations are Switzerland and Belarus.
Some key features of the document are not explained and experts have already warned about that. Artyom Inutin, Head of Investments at TMT, commented:
“The MinComSvyaz must not manage the processes within these financial platforms. This is what I am afraid of. Documents often leave room for double interpretation and this could hurt the ICO process.”
Belarus and Switzerland are trying to attract Initial Coin Offerings to their countries by offering clear operative frameworks with a friendly approach towards cryptocurrencies and blockchain start-ups. A presidential decree signed in Belarus, and released on March the 28, legalizes cryptocurrency activities in the country. In a similar way as Russia is trying to do, entrepreneurs and companies that want to invest in cryptocurrency activities, need to register as residents of the Belarus High Technologies Park.
The measures would reduce the bureaucratic procedure in order for enterprises to start operating in the country. At the same time, employees and investors in the Hi-Tech Park will not have to apply for work permits. Additionally, enterprises that start to operate in the country will have tax reductions and other benefits in the next five years. The document released by Russia may be good to regulate the environment, but it is not ideal for businesses to start operating in the country.