A draft law being considered by Russian lawmakers is meant to regulate the cryptocurrency crowdfunding industry (ICOs). It proposes to set a maximum annual limit of $9,000 for ordinary citizens wishing to participate in any crypto and blockchain related crowdfunding efforts. This bill is one of three pieces of legislation aimed at regulating the cryptocurrency industry in Russia.
The Russian Duma held its first reading of the the proposed bills back in May of this year. In the first reading of the proposed legislation on regulating the cryptocurrency crowdfunding industry, the bill did not contain any limits for individuals participating in ICOs. It only recommended that such limits should be determined by the Central Bank of the Russian Federation (CBR).
Individual Limits of $9,000 Per Year and $1,500 Per Project
Amendments to the draft law puts a cap on the total amount private citizens can use to invest in crowdfunding endeavors. This maximum limit has been set at 600,000 Rubles ($9,000) per annum. Out of this $9,000, individual investors cannot exceed 100,000 Rubles ($1,500) per crowdfunding project.
Any amount above the 600,000 Rubles will need mandatory approval of Russia’s Federal Financial Monitoring Service: Rosfinmonitoring. The regulatory authority was created in 2001 by President Putin to collect and analyze financial transactions in order to combat local and international illegal activities. These activities include money laundering, terrorist financing, narcotics funding and other related activities.
Exemptions to the Limits
According to the draft bill, professional investors will not be affected by the aforementioned limits. As with all other global jurisdictions, known professional investors have to meet certain criteria as outlined by the respective claws of the land. In the case of Russia, its laws provide clarity as to how one can qualify to become such an investors. One such requirement is at least 2 years experience working in Russia’s securities industry.
Next Reading of the Bill
The draft bill will be read again and voted on by the Russian Parliament in January, 2019. This is according to one of its authors who is also the Chairman of the Financial Markets Committee, Anatoly Aksakov.
What are your thoughts on Russia considering the draft bill that will set a crowdfunding limit of $9,000 for each of its individual citizens? Please let us know in the comment section below.