Russian officials must now declare crypto holdings

Russia's public officials will be mandated to declare all private crypto assets holdings from New Year’s Day, 2021.

The requirements were announced on Oct. 20 by the office of Russian prosecutor general, Igor Krasnov, following a meeting with 15 fellow prosecutor generals representing member states of the Shanghai Cooperation Organization (SCO).

“Starting next year, civil servants will be required to declare [virtual] currencies on an equal basis with other assets,” Krasnov said.

In 2018, Russia’s labor ministry announced that public officials would not need to declare virtual asset holdings in their tax reports due to the unregulated status of crypto. As such, concerns have lingered that crypto assets may be the financial instrument of choice for bribery and corruptions

Over the past three years, the Prosecutor General’s Office claims to have confiscated more than $440 million worth of undisclosed, non-crypto assets from public officials.

The new requirements follow new laws signed by President Vladimir Putin in July that will classify crypto assets as akin to physical commodities from 2021 — recognizing virtual currencies in the country for the first time.

While the laws do not recognize cryptocurrencies as legal tender, they will legitimize crypto-related activities across Russia.

Alongside SCO member states Russia, India, Kazakhstan, China, Kyrgyzstan, Pakistan, Uzbekistan, and Tajikistan, the prosecutor generals of Afghanistan, Belarus, Mongolia, Iran, Azerbaijan, Cambodia, and Armenia — which are non-member partners and observer states to the SCO — were also present at the meeting. The gathering centered on the topic of combating corruption.

The Russian announcement on crypto reporting suggests similar laws may soon be enacted across the Eurasian region.

In August, Russia’s Federal Financial Monitoring Service claimed it had developed a way to “partially” de-anonymize transactions using Bitcoin (BTC), Ethereum (ETH) and the popular privacy coin Monero (XMR). The agency also noted that several “overseas countries have also shown interest in the system,” suggesting it is looking to sell the system to allied nations.