The Russian Ministry of Communications has this week published the first drafts of upcoming ICO guidelines. Moscow is focusing on its own currency. In future, accredited initial coin offerings on Russian territory will only be possible with the help of the ruble. The guidelines are part of a larger legislative package on crypto-regulation, which is to be passed by the Russian State Duma by July. However, experts doubt its effectiveness.
Russia’s regulatory Bitcoin loophole system is taking shape:
As Kommersant reports this week, the Russian Ministry of Tele- and Mass Communications, MinComSvyaz for short, has published first drafts for the regulation of Initial Coin Offerings (ICOs). The document focuses on the currently still voluntary accreditation of Bitcoin loophole providers. After the Russian ICO scene experienced a real boom last year, Moscow seems to want to profit economically from the worldwide pull to issue new crypto currencies. Because the rouble itself is at the centre of the guidelines. Here is the review.
For successful accreditation, ICOs on Russian territory will in future only be able to be carried out with the help of the national currency. To issue their own token, providers will also have to prove that they have a starting capital of 100 million rubles (just under 1.4 million euros) and obtain a licence from the Ministry.
In addition, the money from the sales must demonstrably flow into Russian accounts instead of abroad. At the same time, nominal fixed prices are to be determined at which the providers are obliged to repurchase the shares from previously registered investors with their proceeds. This is likely to attract interested investors, but to raise suspicion among suppliers.
Guidelines leave gaps – brake or accelerator?
Apart from that, however, the guidelines currently leave gaps. Experts warn that the document contains no references to ICO specifics such as presales or lock-ups. In the course of such pre-sales, the initial prices are usually much lower than in the case of mass sales. The presale often serves as a launch pad and foundation for further infrastructure before the leap into mass business. Lock-ups, on the other hand, prescribe the holding period for first-time buyers.
This leaves the actual trading moments of interest to investors and traders untouched by regulation. The director of the Russian Crypto and Blockchain Association RACIB, Arseni Sheltsin, therefore doubts the effectiveness of the regulations vis-à-vis Kommersant.
„It is difficult to comment on the guidelines in any way, because they are detached from reality“.
However, this would also create uncertainty. He points out, however, that the vague, unfamiliar language of the guidelines could lead to future collisions and deter ICO providers.
In order to prevent this from happening and to straighten out such linguistic irregularities, the draft law is currently still in public deliberation. Companies and associations such as Sheltsin’s RACIB can announce their interests to the ministry by mid-April.
The fact that accreditation takes place on a „voluntary basis“ is also a sigh of relief.
The guidelines are part of a larger regulatory effort aimed at „legalizing“ crypto currencies. The deputies of the State Duma are currently in the process of discussing a corresponding legislative package, which was introduced by the Deputy Minister of Finance in January of this year.
This law provides for crypto currencies to be regarded as digital analysis products in the future, not as means of payment. In addition, their trading will only be possible via state-authorized stock exchanges. It was only at the beginning of the month that President Putin urged that the package be adopted by July.