For some time, the Russian government has been on a journey to search for appropriate legislation to regulate the cryptocurrency market.

In a new finding, the Russian Ministry of Finance has proposed a set of measures that may make failure to report and declare cryptocurrency holdings illegal, and punishable with potentially huge financial fines.

newspaper reported “Kommersant” Under the new draft law presented by the ministry, those who own cryptocurrencies can be punished with financial fines if they do not report what they own.

The Ministry of Finance is scheduled to meet with stakeholders and policy makers this week to discuss new versions of bills to be adopted in connection with Russia’s first cryptocurrency law, which will enter into force on January 1, 2021.

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As stated, the draft cryptocurrency law only carries a glossary of all things related to cryptocurrency and blockchain.

But it appears that the latest proposed draft, which She said Kommersant newspaper has seen copies of it, indicating the imposition of what appear to be harsh measures for cryptocurrency holders who fail to inform the state of their cryptocurrency holdings.

The same newspaper reported that the proposals require all individuals who receive more than $1,300 per year to report to the tax authorities.

Cryptocurrency holders will be required to submit an annual report on their transaction history and cryptocurrency balances.

Failure to do so will result in a fine of at least $650 or up to 30% of an individual’s total crypto holdings.

The aforementioned source also quoted a tax attorney at Russia-based law firm Bryan Cave as saying that if the amendments are approved, the first report will have to be submitted by April 30, 2021 for the current fiscal year.

Ms. Maria Stankevich, Head of Business Development at EXMO, said: to sourceThe liabilities in and of themselves are too harsh to be fair at all, and she stated:

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It is clear that the document was written in a hurry, because it contains a lot of contradictions, for example regarding the criminal responsibility of legal entities.

The ministry is just trying to test the waters and see how the community will react.

Overall, this document was created by people who don’t know much about global best practices in regulating cryptocurrency.

To be sure, these people did not pay much attention to the recommendations of the Financial Action Task Force (FATF).

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