Jail time awaits Bitcoin users in Russia, report says

Jail time awaits Bitcoin users in Russia, report says

Bitcoin users in Russia could be sent to jail, if the government gets its way.

Officials in Russia has been actively opposing the use of bitcoin and other digital currencies in the country on grounds the electronic currencies, considered as money substitutes, will only bring problems to the country.

Jail time awaits Bitcoin users in Russia, report saysThe latest proposal comes from the Ministry of Finance of the Russian Federation, which laid out new terms of punishment for those who use bitcoins and engage in cryptocurrency trade and mining activities.

A source told Russian news agency Interfax that ordinary Russians found guilty of using digital currencies will face imprisonment of up to four years and a maximum penalty of 4000 rubles or about US$7,000, which the person will have to pay upfront of “with any salary or other income for the next three years.”

Bitcoin traders and miners, on the other hand, face severe punishments.

According to the report, bitcoin enthusiasts will be imprisoned for up to six years and pay a penalty of 1 million rubles of about US$14,000, or they have to pay the equivalent of their salaries for a period of two to four years.

Executives or managers at financial institutions such as banks, insurance companies, pension funds, and traders face even harsher punishments. According to the news outlet, executives will face jail time of up to 7 years and a penalty reaching 2.5 million rubles or they will have to transfer an equivalent amount of their income for a period of two to four years.

The finance minister is concerned that digital currencies will be used in illegal activities like money laundering, the source told Interfax.

Last year, Deputy Finance Minister Alexey Moiseev said the country is working on a draft law that will penalize the conversion of digital currencies into the ruble. However, the Russian government is supporting the blockchain—bitcoin’s underlying technology because it “has potential relevance… for the development of e-commerce.”

“We feel that blockchain technology is very important in the development of various Internet-based services,” Moiseev told CoinDesk.