Proposed Punishment for Using Bitcoin in Russia Raised to 4 Years of Labor

The Russian Ministry of Finance has reportedly raised its proposed penalties for using Bitcoin in the country.

The Russian Ministry of Finance has reportedly raised its proposed penalties for using Bitcoin in the country.

Members of organized groups, such as businesses, that are caught violating the proposed ban can face 4 years of correctional labor, according to Russian news site Izvestia citing a Ministry source.

Join the iFX EXPO Asia and discover your gateway to the Asian Markets

When a new set of penalties was first reported one month ago, the maximum punishment for organizations was 2 years of correctional labor or a fine of 500,000 rubles ($7,940, USD/RUB = 62.97). For individuals, it was one year correctional labor, or a fine of 300,000 rubles ($4,764), or one year’s worth of income.

Suggested articles

Going Past the Great Wall: Things to Consider When Entering the Asian MarketGo to article >>

According to a report by The Economist, 43% of men and 60% of women jailed in Russia work in labor camps, which are said to resemble those of the Soviet gulag in several respects.

The Ministry originally proposed a set of monetary penalties roughly one year ago. It drafted a schedule of fines broken down by the nature of the Bitcoin ban violation and whether the violator is an individual, business or government official. The proposed prohibitions include the transfer or mining of bitcoins, as well as the dissemination of information related to such activities.

The state of Bitcoin in Russia has been hanging in the balance for roughly two years, its assumed legality changing numerous times. Those looking to ban Bitcoin cite concerns of its use in money laundering. Many suspect that authorities are imposing the ban to prevent capital flight, a concern that intensified with the crumbing of the country’s economy and ruble late last year.

At the beginning of 2015, Russia’s Deputy Minister of Finance Alexey Moiseev declared that Bitcoin will be banned this year.

Got a news tip? Let Us Know