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Alexander Nadmitov about pro et contra of the Finance Ministry’s draft law on digital financial assets

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Alexander Nadmitov about pro et contra of the Finance Ministry’s draft law on digital financial assets

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Alexander Nadmitov, Managing Partner of Nadmitov, Ivanov and Partners Law Firm commented on the Draft Law of the Ministry of Finance “On Digital Financial Assets” for Pravo.ru.

According to Alexander, an advantage of this draft law is the legislator’s attempt to give legal qualification of such concepts as cryptocurrencies, mining, token issue and smart contracts: “In Russia there are small ICO market and cryptocurrency market with high growth rate. To date they are in a legal “gray” zone. I am glad, that the legislator decided to settle these issues, but there are questions, how these will be implemented in practice.”

Alexander Nadmitov also states, that a number of strict restrictions of the draft law do not contribute to the development of the legal ICO market, mentioning the following shortcomings: firstly, mining is recognized as entrepreneurial activity, unqualified investors can invest a maximum of 50,000 rubles in digital tokens; secondly, exchange of digital finance assets may occur only through regulated participants of the financial market, that increases transaction costs and limits their scope of application; and thirdly, it is unclear how VAT will be charged on deals with digital financial assets. In December 2017 the firm consulted on the transaction, where the client bought shares of the U.S. corporation for bitcoins under New York law. “If it was carried out under the draft law of the Ministry of Finance, we would have to use the services of the operator. This would increase the transaction costs,” says Alexander Nadmitov.

Nadmitov, Ivanov and Partners Law Firm actively advises on ICO issues, mining of cryptocurrencies and related transactions.

More details about pro et contra of the Finance Ministry’s draft law: https://pravo.ru/review/view/147482/?cl=N

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