Russian Government Increases Scrutiny Of Crypto Market To Prevent Tax Evasion

The government in Russia has increased scrutiny of the crypto market to catch tax evaders using cryptocurrencies. Russia’s Federal Taxation Service (FNS) has expressed apprehensions about the negative impact it would have on the country’s treasury if cryptocurrencies are not monitored.

The head of FNS, Danniil Egorov, said in an interview that these decentralized crypto tokens could drastically reduce Russia’s tax base. FNS is also now exploring ways to prevent tax evasion through crypto. Russian media group RBC quoted Egorov as saying that automated tracking systems are being installed to process large volumes of data. This will allow links to the crypto market to be traced.

The system of cryptocurrencies is decentralized in which records are kept using cryptography. No bank or other intermediary is involved in this. Cryptocurrencies were allowed in Russia until the beginning of this year. However, they cannot be used as an exchange of goods and services. Russians can mine, trade and hold cryptocurrencies.

The use of cryptocurrencies as a payment option is banned in Russia, and those doing so can be jailed. However, the Russian government has talked about making the country its own regulated digital currency. It is a crime in Russia to hold more than $1,300 in cryptocurrency without a declaration. Those who do so can be fined and sent to jail.

Apart from Russia, some other countries are also looking at ways to integrate taxation with cryptocurrencies. For example, in India, the finance ministry has set up a committee to explore the possibility of taxing income from trading cryptocurrencies.

Earlier this month, US President Joe Biden also hinted at a new provision for provisions that would apply to cryptocurrencies. The cryptocurrency market is growing around the world. According to data from CoinMarketCap, this market is worth around $29 million.

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