Russia’s New Cryptocurrency Law — Translated

This isn’t a big long analysis post.  Russia’s Duma approved the new cryptocurrency law on January 25th.  It was published by the Ministry of Finance.  You can read it in Russian here. 

I put the whole document through Bing Translator this morning for y’all to read.

Federal law

On digital financial assets

Chapter 1. General provisions

Article 1. Subject of regulation and scope of the present federal law

  1. This federal law regulates the relations arising in the creation, release, storage and circulation of digital financial assets, as well as the exercise of rights and performance of obligations under smart contracts.

Article 2. The basic concepts used in this federal law

For the purposes of this federal law the following basic concepts are used:

Digital financial Asset – property in electronic form, created using encryption (cryptographic) means. The ownership of this property certified by entering digital records into the register of digital transactions. Digital financial assets include cryptocurrency, a token. Digital financial assets are not a legal means of payment in the territory of the Russian Federation.

Digital Transaction – an action or sequence of actions aimed at creating, releasing, and handling digital financial assets.

Digital record – Information about digital financial assets, recorded in the register of digital transactions.

Register of Digital Transactions – a systematic database of digital recordings, formed at a certain point in time.

Distributed Register of Digital Transactions – a systematized database of digital transactions, which are stored, simultaneously created and updated on all the media of all the participants of the Register on the basis of the given algorithms, providing its identity All registry users.

Members of the Digital Transaction Registry are those who perform digital transactions in accordance with the rules of the digital transaction registry.

Validator – a legal or natural person who is a member of the digital transaction register and performs activities to validate digital records in the digital transaction registry in accordance with the rules of the Digital transaction registry in accordance with the rules of the digital transaction registry.

Operator of Digital Financial Assets Exchange – a legal entity carrying out transactions on the exchange of digital financial assets of one type on digital financial assets of another kind and/or exchange of digital financial assets for rubles or foreign currency. Operators of the exchange of digital financial assets can be only legal entities, which are established in accordance with the legislation of the Russian Federation and carry out the activities specified in articles 3 to 5 of the federal law of April 22, 1996 № 39- Securities market, or legal entities, which are the organizers of trade in accordance with the federal law of November 21, 2011.  № 325-FZ  “on organized auctions “.

Validation of a Digital Record – a legally significant action to confirm the validity of digital records in the register of digital transactions, carried out in accordance with the procedure established by the rules of maintaining the register of digital transactions.

Mining – entrepreneurial activity aimed at creation of cryptocurrency and/or validation for the purpose of receiving remuneration in the form of cryptocurrency.

Cryptocurrency – a type of digital financial asset that is created and posted in the distributed registry of digital transactions by members of this registry in accordance with the rules of the digital transaction registry.

Token – a type of digital financial asset that is issued by a legal entity or individual entrepreneur (hereinafter – the issuer) for the purpose of attracting financing and is taken into account in the register of Digital Records.

Smart Contract – A contract in electronic form, the fulfillment of rights and obligations on which is carried out by automatic digital transactions in the distributed register of digital transactions in a strictly defined by them sequentially and at the onset of certain circumstances. Protection of the rights of participants (parties) of a smart contract shall be carried out in a manner similar to the procedure of protection of the rights of Parties to an agreement concluded in electronic form.  Digital wallet is a software-technical tool that allows storing information about digital records and providing access to the register of digital transactions. Digital purse is opened by the operator of the exchange of digital financial assets only after passing the procedures of identification of its owner in accordance with the federal law of August 7, 2001 № 115-FZ “On counteracting the legalization (laundering) of income, And the financing of terrorism. ”

Article 3. Token release Features

  1. For the purposes of this Federal law, the issuance of tokens refers to the sequence of actions aimed at alienating the issuer of tokens of their purchasers. A token of a particular type can have only one issuer. Persons who are not in accordance with the federal law of 22.04.96 № 39-FZ “On the securities market” by qualified investors, can purchase in one issue tokens for the amount of not more than fifty thousand rubles. In this case, the acquisition of tokens by persons who are not in accordance with the federal law of 22.04.96 № 39-FZ “On the securities market” by qualified investors is carried out only by crediting the token purchased by him to a special account, Opened by the purchaser operator of digital financial assets Exchange, which is the owner of the digital purse used to store information about the purchased tokens and the order of access to the register of digital transactions.
    1. In the case of acquiring tokens by persons who are under the federal law of April 22, 1996 № 39-FZ “On the securities market” by qualified investors, a digital purse used to store information about the purchased Qualified investor tokens and the order of its access to the register of digital transactions can be opened in the name of such a qualified investor.
  2. The procedure for issuing tokens consists of the following steps:
    1. Publication by the issuer of tokens in the network in the Information and telecommunication network “Internet” of the offer, containing a proposal for the purchase of issued tokens, (hereinafter – the public offer on the issuance of tokens), the investment memorandum, as well as other Documents required for issuing tokens;
    2. Conclusion of contracts, including in the form of a smart contract, aimed at the alienation and payment of tokens of their purchasers;
  3. The public offer to issue tokens shall contain:
    1. Information about the issuer and its beneficiary (if any): The full name of the issuer of the tokens and its beneficiary (if any), the location of the permanent executive Body of the issuer and its beneficiary (if any), the official website of the issuer in Information and telecommunication network “internet “;
    2. Information about the validator: the full name (for an individual-surname, first name and patronymic) of the validator, which performs the validation of digital records in the register of digital transactions issued tokens, the location of the permanent executive Authority (for a physical person-the address of the place of residence), official site in the information and telecommunication network “internet “;
    3. Information about the person carrying out the depositary activity to which the copies of the public offer on the issue of tokens and investment memorandum are transferred (in case the issuer independently takes into account the rights of the holders of the tokens);
    4. The rights granted to the holder of the token and the procedure for exercising such rights;
    5. The purchase price of the issued token or the order of its definition;
    6. The date of commencement of contracts for the purchase of issued tokens;
    7. The order of acceptance of the public offer on issuance of tokens, including the term for the direction of acceptance, as well as the order of payment of the purchased tokens;
    8. The indication that persons who are not in accordance with the federal law of April 22, 1996 № 39-FZ “On the securities market” by qualified investors, can acquire within one issue tokens for the amount of not more than fifty thousand rubles;
    9. Rules for maintaining a register of digital transactions;
    10. Information about how to open digital wallets used to store information about purchased tokens and how to access the digital transaction registry.
    11. A public offer to issue tokens must be signed by an enhanced qualified signature of the person exercising the functions of the sole executive body of the legal entity – the issuer or the individual entrepreneur-issuer.
    12. If the registration of the rights of the holders of tokens is carried out by the issuer independently, the issuer is obliged to deposit a copy of the public offer on issuance of tokens and investment memorandum to the person carrying out the depositary activity.
  4. The Investment Memorandum shall contain:
    1. Information about the issuer: Full and abbreviated name, purpose of creation (if any), main types of economic activity;
    2. Information about the shareholders (participants) of the issuer, as well as the structure and competence of the issuer’s management bodies;
    3. The main objectives of token issuance and the direction of the use of funds obtained as a result of token issuance. In case the issuance of tokens is carried out for the purpose of financing a certain project, the description of such project is given, including business plan (if any) and terms of realization of the project;
    4. Information that the issuer deems necessary to indicate in the investment memorandum.
    5. The investment Memorandum shall be signed by the person exercising the functions of the sole executive body of the legal entity-the issuer or the individual entrepreneur-issuer, confirming the authenticity and completeness of the whole Information contained in the investment memorandum.
  5. The offer on the issuance of tokens, investment memorandum, rules for the maintenance of the Register of digital transactions, as well as other documents, the publication of which in accordance with this federal law is carried out simultaneously with the public offer on the issue Tokens shall be published not later than 3 working days before the specified in the offer on the issuance of tokens of the date of commencement of contracts, aimed at alienating the issuer of tokens to their owners.
    1. Prior to publication of the offer for the issuance of tokens, issued tokens may not be offered to potential purchasers in any form and by any means using advertising.

Article 4. Peculiarities of circulation of digital financial assets.

  1. The owners of digital financial assets shall have the right to make transactions on the exchange of digital financial assets of one type on the digital financial assets of another type and/or the exchange of digital financial assets for rubles, foreign currency and/or other property only Through the operator of the exchange of digital financial assets. In this case, these transactions, concluded with the participation of the operator of the exchange of digital financial assets, which is the organizer of trade in accordance with the federal law of November 21, 2011 № 325-FZ “on organized bidding “, shall be carried out in According to the rules of organized trading digital financial assets registered in the central Bank of the Russian Federation.
  2. Transactions on the exchange of digital financial assets by persons who are not under the federal law of April 22, 1996 № 39-FZ “On the securities market” by qualified investors, shall be carried out only by crediting or writing off of digital Financial assets from a special account opened by the operator of digital financial assets Exchange, which is the owner of a digital purse used to store information about digital financial assets and the procedure of access to the register of digital Transaction. The procedure for opening and maintaining these special accounts shall be established by the Central Bank of the Russian Federation.

Article 5. The procedure for the entry into force of this federal law.

This federal law shall enter into force after 90 days from the date of its official publication.

President of the Russian Federation

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