New restrictions for Russians on Binance and sanctions against BitRiver. Highlights of the week

The bitcoin exchange rate gained 1,2% over the past seven days. The asset reached the highest values on April 21, when 1 BTC was trading at $42 970, the lowest values were recorded on April 18, at $38 500 per coin. As of April 22, the bitcoin exchange rate is $40 400 (according to the Binance crypto exchange).

The second-largest cryptocurrency by capitalization, Ethereum, has fallen in price by nearly 1% over the past seven days. The native token of the Binance cryptocurrency exchange (BNB) fell in value by 1,7%.

The total capitalization of the crypto market rose from $1,95 trillion to $1,97 trillion during the week, with bitcoin dominating at 38,9%. Ethereum’s share is 18,3%, according to CoinGecko. According to the weekly infographic of the Coin360 portal, most of the assets are in the green zone on April 22.

Source: Coin360

New restrictions for Russians

On April 21, Binance, the world’s largest crypto exchange by trading volume, imposed restrictions on Russian citizens, companies, and individuals located in Russia. The restrictions affected those accounts with an amount in excess of €10 000.

Such accounts have been put into “withdrawal only” mode and users cannot trade or deposit additional funds into their account. The limit covers all spot, futures, and custody wallets, as well as interest on deposits and staking. 90 days will be provided for closing positions. Withdrawals to other crypto wallets will remain possible at any time.

Binance stressed that a complete halt of operation in Russia is not yet planned, but the platform’s representatives will continue to study the situation and will follow sanctions in case of their expansion by the international community.

On April 18, the EXMO crypto exchange suspended its operation within Russia. After that, the trading platform launched a separate crypto exchange for users from Russia, Kazakhstan, and Belarus. On March 31, EXMO RBK LTD bought out the Russian, Belarusian and Kazakh parts of the business.

The terms will not change for users, as under the deal EXMO RBK LTD may use the branding, software, technical developments, and the official domain, exmo.me. In the near future, the platform will launch a staking feature and release its own stablecoin.

The BitRiver mining group came under sanctions from the US authorities. On April 20, the US Treasury Department published a press release on its website announcing that it is imposing restrictions on all companies within the group.

BitRiver’s operations and assets, including its 10 subsidiaries, have been completely blocked in the United States, and residents of the country are prohibited from working with BitRiver. The Treasury Department believes that cryptocurrency mining allows Russia to monetize its natural resources, and the US strives to ensure that no asset becomes a mechanism for Russia to circumvent sanctions.

New proposals from the Russian authorities

Cryptocurrencies in Russia may be recognized as a means of payment that is not a monetary unit of the Russian Federation, as well as investments. This is stated in the draft law “On Digital Currency” prepared by the Ministry of Finance.

According to the Ministry of Finance’s finalized version of the draft law, there should be no obligated person (a specific legal entity responsible for the circulation of the asset) in relation to cryptocurrency. The organization of the circulation of digital assets will be available to the operators of exchange and operators of digital trading platforms. Both types of operators are required to enter a specialized register, be defined as AML/CFT (anti-money laundering and counter-terrorist financing) subjects, and their activities will be licensed and monitored by an authorized body. Only Russian legal entities will be able to register as operators. Foreign companies will have to create a business entity to operate in the Russian market.

To buy and sell cryptocurrencies, users will be subject to mandatory identification. All fiat transactions will only be conducted using bank accounts. As for mining, Russian legal entities and self-employed entrepreneurs will be able to engage in it after being included in the relevant register.

The Association of Russian Banks (ARB) proposed criminalizing the storage of cryptocurrencies on non-custodial wallets. According to the ARB Vice President Anatoly Kozlachkov, the concept was developed with the advisory assistance of the Ministry of the Interior. The association believes that a criminal law approach will allow equalizing all participants of the crypto market as persons liable to pay taxes. It will also help the Bank of Russia and the Ministry of Finance to resolve contradictions in the regulation of cryptocurrencies, the ARB noted.

The Federal Taxation Service (FTS) of Russia proposed a number of additions to the Finance Ministry’s draft law “On Digital Currency.” In particular, Russian companies may be allowed to make settlements in cryptocurrency when carrying out export-import operations.

The Federal Taxation Service proposed adding the following provision to the draft law: “Legal entities are allowed to make payments for goods, works and services under foreign trade contracts and receive proceeds from foreign persons in digital currency.” At the same time, companies will be able to buy and sell cryptocurrency for export-import operations only for rubles, with crypto wallets and exchanges. The adoption of the amendments will allow Russia to intensify trade with friendly countries that recognize digital currencies as a means of payment.

Real payments with the digital ruble

The Bank of Russia plans to conduct the first real payments as part of the piloting of the digital ruble in 2023. This was announced by Central Bank Governor Elvira Nabiullina. She explained that the regulator “quite quickly” created a prototype of its own digital currency and is now testing it with banks. Nabiullina noted that the digital ruble should make payments cheaper. The Central Bank Governor added that it will also be used in international payments.