Legal aspects of operations with cryptocurrencies for residents of the Russian Federation

Are cryptocurrencies an object of civil rights in the Russian Federation

Yes, they are.

The list of objects of civil rights is specified in Art. 128 of the Civil Code of the Russian Federation :

“Objects of civil rights include things, including cash and documentary securities, other property, including non-cash money, non-documentary securities, property rights; results of work and provision of services; Protected results of intellectual activity and equated to them means of individualization (intellectual property); intangible benefits ”

As can be seen from the text of the law, this list is not exclusive, and any property rights, results of works and provision of services, and even non-material benefits (for example, “you sing to me, and I will dance to you” - this is an exchange of non-material benefits)

Often there are statements that de "there is no definition of cryptocurrency in the legislation of the Russian Federation and therefore operations with them are illegal" are illiterate.

In principle, legislation should not, and cannot contain, a definition of all possible objects and phenomena of the surrounding reality, except for cases when certain activities or operations with certain objects require special regulation or prohibition.

Thus, the absence of a definition in the legislation indicates that the legislator did not consider it necessary to introduce special regulation or prohibition of the relevant operations. Say, the legislation of the Russian Federation does not contain the concepts “goose” or “fairy tales telling”, but this in no way means that selling geese or telling fairy tales for money is illegal in the territory of the Russian Federation

By its nature, the receipt or transfer of a cryptocurrency is the making of a record in a distributed data registry, and in this sense it is similar to buying and selling a domain name, which is also nothing more than an entry in a distributed data registry. At the same time, the domain name has a well-established practice of using, and even judicial practice of, resolving disputes about the ownership of a domain name.

See also: Analysis of judicial practice on cryptocurrency issues in Russia // RTM Group .

Are cryptocurrencies a “money surrogate”?

No, they are not.

The concept of “money surrogate” is used only in Art. 27 ch. VI “Organization of cash circulation” of the Federal Law of 10.07.2002 N 86- "On the Central Bank of the Russian Federation (Bank of Russia)" And as the title of this chapter refers to the sphere of cash circulation , that is, it prohibits the assignment of cash functions to something -Besides Russian rubles, issued by the Bank of Russia.

This is evidenced by the law enforcement practice in the Russian Federation. Thus, the well-known “case of colions” (a civil case under the suit of the Yegoryevsk city prosecutor’s office to citizen M. Yu. Shlyapnikov on the recognition of the illegal use of the cash colrogates made by him, in which the Yegoryevsk city court of the Moscow region acknowledged the existence of a cash surrogate issue namely, the cash "colions". Then Shlyapnikov released non-cash colions on the Emercoin blockchain, and the prosecutor's office apparently has no objection to this.

Note: It should be noted that law enforcement practice in the Russian Federation of bills of exchange, metro tokens, chips in a casino, gold also does not refer to “money substitutes”

Position of the Central Bank of the Russian Federation

Press Service of the Central Bank of the Russian Federation has released several informational messages
associated with cryptocurrency:

1) "On the use of" virtual currencies "in transactions, in particular, Bitcoin", January 27, 2014 ,

2) "On the use of private" virtual currencies "(cryptocurrency)", September 4, 2017 ,

In respect of which it can be argued the following:

These documents have been issued by the press service, have not been signed by anyone, have not been registered, and cannot legally be considered as having something of regulatory value or applicable when interpreting legislation (see Article 7 of Federal Law of July 10, 2002 N 86 -FZ ), which obviously should be interpreted as the absence of a regulatory position of the Central Bank of the Russian Federation on this issue.

Notwithstanding the above, the texts of the aforementioned press releases:

a) do not contain a direct statement that cryptocurrency is a monetary surrogate,

b) do not contain a statement that operations with cryptocurrency are prohibited in the Russian Federation

c) do not contain statements that banks and non-bank credit organizations should not service operations that use cryptocurrency

See also: Opinion: The CBR has significantly softened its position on cryptocurrency *

That is, if you simulate a situation in which a bank would like to refuse a client to make a payment under a contract involving a paid transfer of cryptocurrency, and the client would insist on making a payment, the above press service messages would not be sufficient to substantiate the legal position of the bank, and more to protect the bank from a possible claim for recovery of damages associated with an unreasonable refusal to the client to conduct a banking transaction.

Are physical and legal entities allowed to residents of the Russian Federation operations with cryptocurrency.

Yes, allowed.

The main official document on this issue is the Letter of the Ministry of Finance of the Russian Federation and the Federal Tax Service of the Russian Federation of October 3, 2016 N OA-18-17 / 1027 * (the text is also on http://miningclub.info/threads/fns-i-kriptovaljuty-oficialnye-otvety.1007/ ), which states:

“the legislation of the Russian Federation does not contain a ban on the conduct of operations by Russian citizens and organizations using cryptocurrency”

Enterprises, banks and non-bank credit organizations have neither grounds nor authority to reject the official position of the Ministry of Finance of the Russian Federation and the Federal Tax Service of the Russian Federation on this issue.

See also: Letters of the Ministry of Finance and the Federal Tax Service: point of view or law?

Are cryptocurrencies “foreign currency”

In accordance with the provisions of the Federal Law of December 10, 2003 N 173-FZ "On Currency Regulation and Currency Control" ( Article. Article 1. Basic Terms Used in This Federal Law ), bitcoin, ether, etc. are not foreign currency, respectively, the calculations in these units are not subject to the restrictions provided for the use of settlements in foreign currency.

This is confirmed by the Letter of the Ministry of Finance of the Russian Federation and the Federal Tax Service of the Russian Federation of October 3, 2016 N OA-18-17 / 1027:

“The existing currency control system does not provide for currency control bodies (the Bank of Russia, the Federal Tax Service of Russia, the Federal Customs Service of Russia) and currency control agents (authorized banks and non-authorized professional securities market participants) to receive information on cryptocurrency transactions from residents and non-residents "

Thus, cryptocurrencies are not “foreign currency” in the sense of the current legislation of the Russian Federation and transactions with them are not associated with the relevant restrictions and regulations. This means, however, that such transactions are generally subject to VAT.

How to reflect cryptocurrency in accounting

Cryptocurrency does not fall under the definition of “intangible asset” according to the Accounting Regulation "Accounting for intangible assets" (PBU 14/2007) )

As in order to be recognized as an intangible asset, an object must meet the following requirements (clause “g”, “g” clause 3, section I. PBU 14/2007):

"g) the object is intended for use over a long period of time, i.e. a useful life of more than 12 months or a normal operating cycle if it exceeds 12 months;
e) the organization does not intend to sell the object within 12 months or the usual operating cycle if it exceeds 12 months; "

Accounting for accounting cryptocurrency can be as a financial investment for PBU 19/02 "Accounting for financial investments"

According to PBU 19.02:

“The organization’s financial investments include: state and municipal securities, securities of other organizations, including debt securities in which the date and cost of redemption are determined (bonds, promissory notes); contributions to the authorized (share) capital of other organizations (including subsidiaries and dependent business entities); loans granted to other organizations, deposits in credit institutions, receivables acquired on the basis of the assignment of claims, etc. ”

In this case, the list is not exhaustive, and the term “etc.” (other) may also include cryptocurrency. At the same time, pure cryptocurrencies (ether, bitcoin) are certainly not securities (however, other tokens on the blockchain may be such in some cases)

Accordingly, it is proposed to display cryptocurrency in accounting on account 58 "Financial investments" ( Order of the Ministry of Finance of the Russian Federation of October 31, 2000 N 94n "On Approval of the Chart of Accounts for Accounting of Financial and Economic Activities of Organizations and Instructions for its Use" ) You can create a special sub-account for this or sub account 58 account.

Those. when buying a cryptocurrency (bitcoin, broadcast) for foreign currency by crediting 52 “Currency accounts”, debit 58 “Financial investments”.
With the sale of a crypt for rubles of the Russian Federation, the corresponding debit is Account 51 "Settlement Accounts" (if for a currency - 52 "Currency accounts", if for cash rubles - 50 "Cashier"), and a loan 58 "Financial investments"

Socio-political aspects, and recommendations for the implementation

It is assumed that the initial operations with cryptocurrency should be carried out in small amounts, and perhaps not with Bitcoin, which sometimes appears in private statements of officials, but with the ether, which not only does not appear in such statements in a negative context, but on the contrary has evidence of indirect approval from the top management of the Russian Federation. The founder of the Ethereum project, Vitalik Buterin, took part in the St. Petersburg Economic Forum (SPIEF) together with senior officials of the Russian Federation , and the President of the Russian Federation also took it, which of course could not have taken place if the Russian government did not have a favorable attitude to the Ethereum project.

In addition, it can be assumed that in the long run, the broadcast has a greater growth potential with the increased use of smart contracts on the Ethereum platform. It should also be noted that, unlike Bitcoin, broadcast has a utilitarian use as a “fuel” (gas) when deploying and executing smart contracts on the Ethereum platform, and as such is necessary for organizations involved in the development and / or study of smart contracts on the blockchain . In addition, the exchange of one cryptocurrency to another, for example eth on btc is available in automatic mode on platforms like shapeshift.io

Options for conducting transactions on the acquisition of cryptocurrency by residents of the Russian Federation

Direct purchase of cryptocurrency for foreign currency.

In this case, a contract is concluded between a non-resident (for example, an offshore company) and a resident of the Russian Federation that the resident of the Russian Federation transfers money to the non-resident in US dollars or euros, and the non-resident ensures that entries are made in the Ethereum distributed registry about the transfer to the address specified in the contract at Ethereum networks belonging to a legal or natural person - a resident of the Russian Federation specified in the contract number of broadcast or bitcoins.

A possible option is also to use a transfer letter of credit for the calculations. The bank discloses a letter of credit in favor of an offshore company upon crediting to the specified in the contract address in the Ethereum or Bitcoin network of the cryptocurrency amount specified in the contract, and the offshore company transfers the payment to the cryptocurrency providers.

Transfer of funds in trust management to an offshore fund, which makes financial investments in the interests of the client, including cryptocurrency, in the interests of the client.

In this case, a cryptocurrency is formally owned by an offshore investment fund, the share in which is acquired by a company - a resident of the Russian Federation. In this case, a scheme can be built in which a company - resident of the Russian Federation also receives a private key and password for managing an Ethereum account, or by other means is able to “cash out” (i.e. pick up in the form of cryptocurrency) at any time its share in the fund. In this variant, it is possible for the bank (or a non-bank credit institution) to simplify the client’s payment, since the contract is not paid for the cryptocurrency, but for a share in the investment fund (which is more common for banks), while the name of the investment fund may appear in the agreement rather than cryptocurrency directly, and a reference to the conditions of its operation.

In accounting, as was shown above, a legal entity reflects its investments at 58 "Financial investments", and when converting a deposit into cryptocurrency, you can simply transfer to another sub-account 58 of the account.