Russian Parliament Attacks Cryptocurrency Along with Ponzi Schemes

Russian State Duma considers several draft laws providing administrative and criminal prosecution for arrangement of companies working on Ponzi schemes, which are broadly referred to in Russia as ‘financial pyramids’. An amendment to the Criminal Code establishes four years of inprisonment for distribution of any information related to such organizations.

Presenter of the draft law, Alexei Moiseev, deputy minister for finance, also proposed to consider banning exchange of bitcoins and other cryptocurrencies for rubles, as he deems digital currencies a means of constructing the ‘pyramids’, or running Ponzi schemes. This move once agains brings into the light the controversy inherent within the Russian officials when it comes to any matters related to digital financial innovations.

The draft law provides punishment for distribution of any information, which ‘contains data on attractiveness of participating in the said activities or calls to participate therein’. Administrative punishment, as opposed to the criminal, provides for a penalty of 5,000 to 1m rubles (roughly $75 to $15,000 at the time of writing).

The State Duma has already passed the draft laws in a first reading.