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United States Congressional Bill Bans Venezuela’s Petro, Calls for Global Investigation of Crypto

Just days after Venezuela announced that they are initiating a public sale of the Petro on 5 November 2018, and have completely re-designed it to be an X11 crypto like Dash, the United States Congress has put forth a bill which will completely ban the Petro. In addition, the bill calls for an international investigation of all other cryptocurrencies designed to circumvent international sanctions.

The Venezuelan Petro was already banned by an Executive Order from President Trump of the United States on 19 March 2018. This bill is similar to the executive order, but cements the Petro ban into congressional law and expands on the ban. The primary reason the Petro is being banned by the United States is that the Petro will likely be used to circumvent international sanctions.

The bill is titled Venezuelan Humanitarian Relief, Reconstruction and Rule of Law Act of 2018, and is a bill with many new laws and efforts concerning Venezuela, with a sub-section on cryptocurrency towards the end of the bill. The ban on Petro specifically says “All transactions by a United States person or within the United States that relate to, provide financing for, provide software for, or otherwise deal in any digital currency, digital coin, or digital token, that was issued by, for, or on behalf of the Government of Venezuela are prohibited beginning on the date of the enactment of this Act.” All agencies of the United States government are given permission to enforce this law. The penalties of breaking the law are unknown at this point, but violating this law could be equivalent to an act of treason.

Further, the United States Congress is calling for a global investigation of any cryptocurrency that is being used to violate international sanctions. Specifically, efforts by states, state-sponsored actors, and non-state sponsored actors to circumvent or evade United States sanctions with crypto will be investigated, and the report submitted to Congress within 6 months. The report will include recommendations on how to inhibit crypto from compromising sanctions.

It will certainly be interesting to watch how Venezuela’s Petro survives in the face of the full weight and power of the United States government. This will be a true test of X11 crypto’s ability to send anonymous and secure transactions.

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Why Experts Are Calling Russia’s Crypto Bill ‘Disappointing’

Several native experts have recently expressed their disappointment with the development of Russia‘s cryptocurrency regulations, citing areas as ”ineffective” and ”far behind” those of other countries.

Discussing the main bill in question, “On Digital Technologies,” Artem Tolkachev, chairman of the Russian Blockchain community since 2016, said that he was ”disappointed” with the current version, pointing to areas that he perceives would create potential inefficiencies.

His main critique points centered about the crowdfunding section prepared by Russia’s central bank, and also the amendments to the Russian Civil Code. His concerns were that both bills were constructed independently and that would consequently make them rather ineffective.

The government has been attempting to regulate the area of cryptocurrency since January 2018, only to be met by different obstacles. The bills which were expected to be passed at the beginning of July have been delayed until October.

Tolkachev thinks that the issues related to passing the bills arise from the ”complexity of the subject” and a lack of intergovernmental consensus over how, and what exactly should be state regulated. Reports have emerged that the Russian Central Bank has become opposed to the Ministry of Economic Development on the subject, with the latter pushing for a more progressive agenda.

Tolkachev was involved with discussions between the central bank, the Ministry of Finance, the Ministry of Economic Development and the general security service regarding how the area could be regulated, trying seemingly unsuccessfully to sell the idea of a crypto-friendly nation. ”Unfortunately, we have what we have. What can I say? That’s it,” he told Cointelegraph.

The president of the Russian Association of Cryptocurrency and Blockchain, Yuri Igorevich Pripachkin, said that despite being consulted during the government’s process, what the legislation looks to be, is in many areas, adverse for the industry.

Pripachkin says that in its current form, the bills put Russia far behind countries such as Belarus and Switzerland who have made great regulatory steps while still promoting the industry.

 

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Ukraine Pursues Crypto Tax Bill

Ukraine is looking to pass a bill that would tax both cryptocurrency operations and assets, according to a draft version of the laws shared by the country’s parliament, the Verkhovna Rada.

A 5% tax on individuals and legal entities is proposed on operations utilizing cryptocurrencies and tokens, with businesses that claim crypto-related profits suggested to pay 18% tax on this total amount. This 18% is the standard corporate and business tax rate in the Eastern European nation.

The proposed legislation is the result of a 23-member strong parliamentary team who are looking to implement the changes to the tax plan gradually between 2019 and by January 2024. The motivation for these individuals lies in a desire to create more state revenue and promote cryptocurrency activities by offering a legally compliant, regulated environment.

A figure of UAH 1.27 billion (approximately USD43 million) is cited by the politicians as the potential amount of state budget revenue that could be collected annually between 2019 and 2024 if the bill is approved by the parliament.

Right now, cryptocurrency operations are not technically controlled by the government, meaning that many are concerned about the legal implications of entering the market and are therefore choosing not to do so, and also that crypto-related businesses are technically working in an unsustainable grey zone, dissuading them from expansion and potentially innovation.

In September last year, the Ukrainian Cabinet of Ministers on the Financial Stability Board held a discussion to determine the legal status of all virtual currencies, overseen by the Verkhovna Rada. The outcome of this was, however, unsatisfactorily clear, and has led to crypto mining operations being raided and shut down, with secret service agents even allegedly stealing profits from the miners in several cases.

With Ukraine still subject to occupation from separatist groups in the regions of Donetsk and Lugansk, the government claims that one of the largest mining raids was connected to Russian banks that were financing the occupation. The Kvazar semiconductor plant in Kiev was raided last year, with over USD 4 million of mining equipment taken, including 1,000 graphics cards and 1,500 hard disks.

Regulating and taxing the cryptocurrency space in Ukraine could well prove to be the solution for solving the troubled climate that seems to be partly a result of the autonomous nature of the space.

 

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