6 min read

Crypto Exchanges& Regulation in Russia

Top exchanges in Russia by Coincub criteria
Article review author
Jonathan Lea
Russia head image

Crypto Country Rating: 5.5/10

7/10
Institutional acceptance
Russia keen not to miss the crypto boat, blockchain technology viewed positively
8/10
Exchanges & Wallets availability
Leading exchanges available
6/10
Government regulation
State controlled exchanges available - strict ban on spending crypto
5/10
Defi acceptance
Debated only
7/10
Financial services
Trading crypto allowed, but not spending
7/10
Transparency
Strict compliance laws and high fines for non-disclosure of taxes
0/10
Spending crypto
Spending ban firmly in place - outcome remains to be seen
7/10
Banks activity in crypto
CBDC being assessed, but conservative bank outlook generaly

Bitcoin and crypto trading in Russia

Spend Bitcoin and cryptocurrency trading in Russia

Accumulating your hard earned, traded or mined cryptocurrency is the easy bit. The hard bit is spending it because Russia formally bans the use of cryptocurrency for buying traditional products and services – in the Russian economy, at least. That’s because it’s not deemed as legal tender for making payments. You can, of course, just sit on it and get richer and richer…or poorer and poorer depending on prices.

Law and crypto trading in Russia

Russia is served by leading exchanges and has a population with high volumes of trading and holding crypto currency but that is not to say Russia is totally sold on Cryptocurrency and has imposed stringent restrictions on its use. Digital currency is not regarded as legal tender for payments, and the ruble remains the only official monetary currency and residents aren’t allowed to receive digital currencies as payment for goods, work, or services. New laws stipulate cryptocurrency as a personal asset. Individual residents and registered legal and corporate entities, registered representations of foreign companies, and international institutions are required to declare their cryptocurrency possessions, rights, transactions, and balances. Failing to present timely reports will incur fines in proportion to the crypto holdings.

Paying tax on my crypto trading in the Russia

Individuals and legal entities empowered to use digital currencies are obligated to inform the tax authorities when the value of any activity exceeds 600,000 rubles in a calendar year. Failure to comply incurs fines of up to 40% of the unpaid taxes.

Tax relief, changing residency and gifting crypto coins Russia

The taxable gross capital/wealth you have accrued is considered to be all capital objects with a sale value that you own at the end of the income year – and that includes your cryptocurrency. Using cryptocurrency as a means of payment and the exchange of virtual currency services can be exempt from VAT but you need tax advice as to the exact circumstances. Overall, the taxation of your gains applies wherever in the world your assets are located and your crypto holdings will be taxable on the gross capital wealth basis whether you gift it or not. Should you change residency, your tax matters will be applicable to your new country of residence

Crypto mining regulations in Russia

The taxable gross capital/wealth you have accrued is considered to be all capital objects with a sale value that you own at the end of the income year – and that includes your cryptocurrency. Using cryptocurrency as a means of payment and the exchange of virtual currency services can be exempt from VAT but you need tax advice as to the exact circumstances. Overall, the taxation of your gains applies wherever in the world your assets are located and your crypto holdings will be taxable on the gross capital wealth basis whether you gift it or not. Should you change residency, your tax matters will be applicable to your new country of residence

Planning your retirement and investing in cryptocurrency in Russia

Owning cryptocurrency may be acceptable, but stock exchanges in Russia shouldn’t list investment products related to cryptocurrency prices according to the Russian Central Bank, which regulates the industry. In a ruling to prevent investors getting access to products they may not understand, the Bank of Russia believes that stock exchange operators should avoid listing any securities that provide payments based on the prices of cryptocurrencies. Asset managers should also exclude such securities from mutual fund portfolios, and brokers should not offer such securities to nonqualified investors. So far, this ruling doesn’t include any central bank digital currencies that may be issued in the future. I think the answer, therefore, is that planning your retirement with cryptoassets may not be the bets way forward.

Russia’s Financial services’ outlook on Bitcoin and crypto economy

Much of the lead taken by Russian banks regarding crypto comes directly from central bank guidelines. To date banks can offer cryptocurrency exchanges – under the supervision of the central bank and new digital currencies can be issued. This lighter touch, following on from a potential ban on cryptocurrency some time back indicates Russian willingness to indulge in the great crypto experiment taking place around the world.

Russia and DeFi: the latest developments

Central banks around the world are all investigating or trialing some form of digital currency and Russia is definitely one of them. The Bank of Russia has analysed the potential of crypto in many respects, including the practicality of issuing a ruble-based central bank digital currency (CBDC). In essence, whilst Russia, in common with some other countries, views cryptocurrency as possibly disruptive to mainstream financial systems, the blockchain technology behind it is seen much more enthusiastically. However, any practical assessment on decentralized finance (DeFi) as a replacement for the existing financial system remains at the level of speculative debate.

Crypto security, transparency and compliance in Russia

Russia has just implemented stringent new laws on the regulation of the cryptoeconomy, but no bans. The rise of cryptocurrency in Russia continues and the Bank of Russia, perhaps accepting that it cannot stem the rise and through which all transactions flow, takes a pragmatic approach. Surveillance of all digital activity is monitored and overseen, including the rise of Russia-hosted ICOs. In an attempt to prevent crypto being used for criminal purposes, Russia’s financial surveillance body, Rosfinmonitoring, has powers to trace suspicious transactions involving crypto. As part of the initiative, Russian public officials have been banned from owning crypto starting this year.

Helpful?
FAQ

New to crypto? Here’s our guide!

FAQ Image #1 01 Why Bitcoin? It seems like the buzz around Bitcoin just keeps growing. Bitcoin is a constantly evolving technology with a passionate community. What is it about the digital asset that makes it such a controversial topic and attractive investment?
FAQ Image #2 02 How to Get Started with Bitcoin It can be difficult to get past the technical jargon surrounding bitcoin (BTC) and other cryptocurrencies in order to figure out how you can buy and store them. Beginners can purchase Bitcoin, for example, on many exchanges using fiat currency like U.S. Dollar, Euro or British Pound.
FAQ Image #3 03 Blockchains 101 Blockchains are a type of database where data is stored in blocks that are chained together. As new data comes in, it is entered into a block, which is then chained to the previous block. The Bitcoin blockchain serves as a ledger that records every Bitcoin transaction in history.
FAQ Image #4 04 Bitcoin in the Real World Ok - you’ve found an exchange, bought your Bitcoin, and stored it safely. What’s next? By now you can buy just about anything with Bitcoin if you try hard enough, from Amazon gift cards to an old master painting. You can also convert your BTC to fiat with ATMs, an exchange, and more.

What people say about us

Aayush Bhatnagar JIO - Senior Vice President

Coincub is a novel crypto exchange aggregator that helps investors to compare different exchanges before taking their decision.

James Gillingham Co-Founder and CEO at FINXFLO

The most comprehensive analysis I found. Have a look, you might be surprised.

Jonathan Knegtel CEO Blockdata

Coincub looks dope! Nice one!