In what is being perceived as a one-sided move, the Russian Ministry of Communications has set forth a new set of ICO regulations under which companies looking to facilitate token sale events will be obliged to guarantee that investors can sell back their tokens.
The regulatory document which was posted on Russia’s official government portal mentions that coin issuers are required to provide proof that they possess at least “100 million rubles of authorized capital” within a legally recognized national bank account.
In addition to this, the government is also ready to position its state currency, the Ruble, as the underlying bedrock of all ICO fundraising activities. As per a respected local news source, MinCom Svyaz now requires:
- ICO initiators to possess valid accreditations for a minimum period of five years. All accreditations are issued and regulated by the ministry itself.
- All fundraising events are required to be registered within the Russian Federation.
- Crypto ventures need to possess specific licenses to facilitate the distribution and development of “cryptographic commodities.”
- Transactions need to be executed via the national currency exclusively, and a registered bank account needs to be associated with all monetary transfers.
In the wake of these developments, many crypto proponents from the eastern block have raised valid questions that seem to have not been addressed by the freshly proposed regulations.
For example, the document does not bring up the issue of “pre-sales” where potential investors have a chance to procure altcoins at reduced rates.
Additionally, the issue of “lock-up” wherein the resale of coins is prohibited for a defined period has also been left out.
Arseniy Sheltsin, head of the Russian Association of Cryptocurrency and Blockchain, responded to the new rulings by saying:
“It’s hard to comment on these regulations in any shape or form because they are disconnected from reality. The document uses inaccurate terminology and is not in alignment with existing regulations which can result in future legal conflicts”.
By tightening the crypto noose, even more, the Russian government seems to be leaving no choice for ICO organizers other than to take their financial ventures elsewhere.
To put things into perspective, out of the all the coin offerings that took place in Eastern-Europe last year, more than half of them were initiated by businesses located in Russia.
Cover Photo by Nikita Karimov on Unsplash