Russian Tax Authority: Bitcoin is legal

Russian financial authorities recently officially issued a document stating the legal status of cryptocurrencies.

The document states that the law treats Bitcoin and unofficial digital currency trading operations as foreign currency transactions, and citizens or companies are not required to make any form of financial declaration.

Artem Tolkachev, a leader of the Russian blockchain community and legal advisor at Deloitte, summarized the Federal Tax Service’s position in relation to the document:

1. Russian federal law does not provide for any currency substitutes, cryptocurrencies or virtual currencies;

2. Cryptocurrency trading activities by Russian citizens and businesses do not violate any laws;

3. Cryptocurrency transactions may serve as evidence of money laundering and terrorist financing;

4. The act of buying and selling cryptocurrencies with foreign currency, domestic currency, or securities is considered foreign currency trading;

5. Under the existing monetary system, Russian residents and non-residents are not required to declare cryptocurrency transactions to the authorities.

Tolkachev expressed his opinion on the document:

The most important point is that Russia will no longer ban cryptocurrency trading. The draft ban previously issued by the Ministry of Finance has been shelved, and they may have to re-write the rules.

In August this year, the Russian Federal Tax Service explained the legal status of Bitcoin to the media. The tax service defines Bitcoin as a foreign currency. If citizens use foreign bank accounts to trade Bitcoin, they need to make corresponding declarations to the tax department. However, in addition to Bitcoin, this statement does not cover other cryptocurrencies circulating in the country.