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The future of regulation and taxation of cryptocurrency assets and mining in Russia

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The future regulation and taxation of cryptocurrency assets and mining in Russia

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Russia step by step creates the rules of the game to regulate the activity of cryptocurrency enthusiasts: in the spring of this year, the concept of “digital rights” appeared in the RF Civil Code, and the laws on digital assets and crowdfunding as the Russian version of ICO are expected to be adopted in autumn.

Taxation of cryptocurrency transactions

The bill on digital financial assets says nothing about cryptocurrency taxation. Rather, it creates a conceptual apparatus that will help key players speak the same language and move further in the development and regulation of the industry. The document will define what “digital financial assets” are, what they are and how they are interconnected with “digital rights” that are already enshrined in the Civil Code.

Meanwhile, the second draft law – on attracting investment using investment platforms (crowdfunding), including ICO – has more to do with tax issues.

For example, if we are talking about investment platforms, this directly implies raising money in exchange for certain digital financial assets. As a result, besides the proceeds, investment digital rights are issued, their turnover occurs – purchase, sale, installment as the authorized capital. This gives the state more opportunities to understand how, when and at what price the sale takes place, to determine the tax consequences of these transactions and recover the necessary amount to the budget.

In general, we can say that now the authorities are striving to create a basis for the subsequent introduction of taxation. Amendments to the Civil Code (Federal Law No. 34-FZ), which will come into force this fall, partially fixed the gap in the legislation. In particular, digital rights were classified as property rights, which made it possible to regulate them from the point of view of the Tax Code.

Meanwhile, before the final approval of the bills discussed now, it is difficult to say whether the authorities are trying to create something new in this area or still adhere to the traditional approach to collecting taxes.

Russian legislation does not yet allow dividing digital assets into cryptocurrency and tokens. Earlier, Elvira Nabiullina noted that she opposes the launch of cryptocurrency in the monetary system, and the regulator is exploring the possibility of using steylcoin.

Now cryptocurrency and tokens are conditionally classified into two categories: those issued on the Russian investment platform and on the other. With an optimistic development of the situation, the concepts of “cryptocurrency” and “token” are expected to be consolidated and their sale and purchase will be equated to conventional money units.

Earlier, the Ministry of Finance did not rule out permission to buy and sell cryptocurrency in Russia. However, it is difficult to determine their official exchange rate, which makes taxation difficult. If an entrepreneur bought tokens, for example, for bitcoins , then the tax authorities will not be able to determine the amount of expenses to calculate the taxable income. There are several possible approaches that can theoretically be applied. One option is to still consider such transactions the exchange of one digital financial asset for another, which does not require the use of a single exchange rate.

In the absence of the official exchange rate of the Central Bank, one can try to determine the average market indicator, but then the question arises – which agency will calculate it and on the basis of which cryptocurrency exchanges? But even this will not solve the problem to the end, as there will be disputes why they took courses from 10 platforms instead of 15, for example, since in this case the averages will be different. So far this approach has not been applied by any country in the world, therefore this development of the situation is possible only in the long term.

A more classical approach is to focus on the fact that tokens as an investment tool will be bought for ordinary ("fiat") money, for example, from a foreign currency account. The bill directly states that digital assets are not legal tender, and the ruble is the only means of payment. In this scenario, this is a common foreign trade transaction, which is easy to track down and calculate expenses at the rate of the Central Bank in rubles, as well as document it. This is an ideal scenario for tax authorities, but it is unlikely to cover a significant amount of operations on cryptocurrency exchanges .

The development of the industry attracts more and more people who would like to make money on trading in cryptoactive assets, playing on growth and falling and making a profit due to the resulting difference in rates. At the same time registering as an individual entrepreneur and working on a simplified tax system, you will encounter gaps in the legislation that can reduce the income of this low-margin business.

Now in Russia, representatives of small businesses in the simplified taxation system choose one of two models of tax payment: 6% of turnover (income) or 15% of profit (income minus expenses). At the same time, VAT is not paid, which gives a serious tax savings, and a number of other taxes.

For example, an entrepreneur bought cryptocurrencies for 100 units, and sold for 110. Given that his profits are not large, he naturally seeks to reduce the tax and pay 15% of the profits, rather than 6% of the total income. But a problem arises here, because according to the Russian legislation that comes into force in the autumn, he bought digital rights, which the Civil and Tax Codes will consider to be property rights. At the same time, the 15 percent “simplified payment” allows you to include in the list of expenses only standard business expenses: for wages of employees, purchase of fixed assets, rental of premises and other things, but not expenses for the purchase of property rights. As a result, the entrepreneur cannot attribute the purchase of cryptoactive assets to expenditures for tax purposes and apply the favorable for USN rate.

The options that remain in this situation are to switch to 6% income tax (turnover), which does not take into account expenses, or go to the general system of taxation with VAT. Both approaches are unprofitable for the entrepreneur, since they significantly increase his tax burden.

Mining Taxation

Mining has long been transferred from the category of a hobby to a full-fledged business, which, despite the current gaps in the legislation, is easy enough to take control and tax.

The complexity of mining computing has increased significantly in recent years, and mining is already being done on an industrial scale. In addition to buying miners, you need to spend money on electricity for their power, cooling systems and other equipment, rent a room and pay a fee for participating in mining pools in order to receive a share of the total revenue earned.

Tax authorities may apply a universal approach to this type of activity, taking into account a number of key features of business activities stipulated by the Civil Code of the Russian Federation.

  • Firstly, an entrepreneur performs a series of actions with a specific goal – acquires technical means for making profit.
  • Secondly, his business is systematic, that is, a person not only remembered once, turned off the device, put it on the shelf and forgot, but performs certain actions regularly.
  • Thirdly, he earns income by earning cryptoactives and turning them into fiat money. As a result, according to formal signs, the tax authorities may well call this activity entrepreneurial and collect taxes.

At the same time, even if a businessman has not registered as an individual entrepreneur, then it will not be so difficult to calculate it. First of all, the bank’s attention will be attracted by regular financial receipts of large sums from abroad with an unclear purpose of payment. After the necessary inquiries, the tax authorities, in turn, will understand that this is money from the “exit to Fiat” – sales of the extracted cryptocurrency for ordinary money, for example, on cryptocurrency exchanges. As a result of control measures, they will discover a mining farm and start collecting unpaid taxes.

In particular, for the lack of registration as an entrepreneur, an administrative fine of up to two thousand rubles was established. For conducting an activity by an organization or an individual entrepreneur without registering with the tax authority – a tax penalty of 10% of the income received during a specified time as a result of such activity, but not less than 40,000 rubles. For failure to provide tax returns – 5% of income for each month of delay, but not more than 30% of the total income.

In addition, there will be additional taxes that could arise if the miner had registered as an individual entrepreneur. As there is no registration, as well as the choice of a simplified taxation system, at least 13% of personal income tax and 20% of VAT on the general taxation system will be charged from it.

As a result, if the tax payment requirement is not fulfilled within two months, the materials will be handed over to the investigating authorities, where the issue of a criminal case will be decided if the amount of unpaid taxes exceeds 900,000 rubles.

The tax authorities have not yet developed a uniform approach to how the Russian legal field will regulate digital financial assets, both domestic, which will be issued under the new law, and foreign, which are used in the world now.

This forces testers to use the control mechanisms that are available to them now and be guided by simple logic: people can earn cryptoactive assets for as long as they want, but in the end, everyone needs real money. Since the funds received are transferred with the help of banks, this allows them to be detected, measured and taxed. In this regard, crypto enthusiasts should plan to tax their incomes in advance.

According to Forbes.

Posted July 11, 2019
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Huobi Token overview: HT cryptocurrency features, where to buy and how to store tokens?

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Recently, the issue of own coins has become a very fashionable trend among cryptocurrency exchange exchanges . The exchanges use this method in order to expand the user base and attract more investments.

One of the largest marketplaces in the cryptocurrency market, the Huobi exchange , was no exception and also actively promotes its internal coin Huobi Token (HT). What advantages are the owners of cryptocurrency Huobi Token, we consider later in the article.

What is the cryptocurrency Huobi Token? History of creation

Prerequisites for the creation of cryptocurrency Huobi Token served as a ban on cryptoindustry in China in 2017. It was then that the management of the Huobi corporation had to take urgent measures to rehabilitate the business.

Due to the introduction of regulatory changes, the largest cryptocurrency exchange at that time, Huobi, whose main office was in Beijing, was discontinued. But after only a few months, the Huobi team moved its business to Singapore and launched a new project – Huobi Pro.

If the initial version of the Huobi Exchange was mostly aimed at users of China, then Huobi Pro headed for the international market. Huobi Pro uses the over-the-counter trading model (OTC) and has concentrated in itself all the necessary options for global traders. Despite this, the new project of Huobi Corporation did not show the volumes that the management expected. Trading volumes on Huobi Pro accounted for only 4-5% of the volume of the exchange before closing the business in China.

The “lifeline” in this situation was the decision of the leadership to launch its own cryptocurrency . This initiative was not aimed at creating a new asset for investment, but for the internal needs of the exchange — attracting new traders, increasing the loyalty of existing users, and also returning the exchange's leading positions in the ratings .

The launch of a new cryptocurrency did not follow the standard ICO scheme, which most projects use for the initial launch of coins. At the beginning of 2018, the exchange began to spread the internal cryptocurrency Huobi Token among the VIP users of the exchange. Traders were offered to buy a premium package of services that included a certain number of HT tokens. Becoming an HT holder, traders could use coins to pay commissions and other internal payments. This method of distributing coins was called the initial exchange offer (IEO).

In the first 2 weeks after launch, 60% of the total supply of coins, which amounted to 300 million tokens, shattered among the users of the exchange. The remaining 40% (200 million coins) were reserved by the company for life support of the platform.

The Huobi team also announced the parallel creation of the Huobi Investor Protection Fund (HIPF). In order to contain token inflation, Huobi Pro conducts quarterly repurchase of coins using 20% of its net profit. All collected funds are accumulated on a separate Ethereum wallet and are stored to compensate for any losses that may arise from users in the process of working with the platform.

To ensure the transparency of its activities, the company has opened access to viewing the balance of the HIPF wallet for everyone. Thus, Huobi tried to suppress the cryptocurrency volatility and create the most stable token.

The release of its own cryptocurrency helped to increase the capitalization of the platform and increase the level of customer retention by providing them with exclusive working conditions on the exchange. According to the company's management, the internal token of the exchange was to become a single link between the users of the exchange branches in South Korea, the USA, Australia, Canada and other countries.

The initiatives undertaken have really borne fruit and now the Huobi Exchange is ranked second in the rating of cryptocurrency exchanges according to CoinMarketCap.

By the way, for Huobi there is a large team of very competent developers and marketing specialists. Led by Leon Lee, a former Oracle programmer, the Huobi team has raised the project for the second time and raised it to the top.

Key features of HT tokens

The cryptocurrency Huobi Token is released on the Ethereum blockchain and complies with the ERC-20 standard. To a greater extent, the internal cryptocurrency of the exchange is a loyalty program for traders, so consider what advantages its holders receive.

Reduced transaction fees

The exchange system provides for discounts, which apply exclusively to customers with VIP-status. VIP client status is offered to Exchange users to purchase for the Huobi Token cryptocurrency. The discount depends on the level of your VIP-package, while the owner of the package with the highest VIP-level receives a 50% discount on all transactions that are made during the period of the service package.

The service package has no expiration date. All privileges you receive as long as you pay for a package subscription. This advantage is widely used by large investors and traders with large trading volumes, who through the use of VIP-status can save huge amounts of money on commissions.

Convenient exchange tool

HT makes a trading pair with the most popular cryptocurrencies, so this token is very convenient to use as a medium of exchange for the main cryptocurrencies. The most popular among traders are HT trading pairs with cryptocurrency Tether, Bitcoin and Ethereum.

Promotion of new tokens

HT owners always receive bonus coins from each listing of new cryptoactive assets on Huobi Pro.

Investor Protection Program

Due to the existence of the HIPF fund, all HT holders are insured against financial losses related to the instability of the cryptocurrency market, fraudulent activities or other losses related to the activities of the exchange.

Decision making

HT owners have a preferential right to participate in various surveys and polls related to the life and development of the Huobi Pro exchange. Voting may relate to the inclusion of a new cryptocurrency in the listing of the exchange or other issues related to the development of the ecosystem of the project.

Where to buy and how to store Huobi Token?

The easiest way to get HT coins is to buy them on the Huobi native exchange. You can buy Huobi Token for BTC, BTH, ETH, ETC, LTC and USDT. In addition, the coins are presented on the trading platforms of HitBTC, Bibox, BitMax, Gate.io, Yobit, LBank, etc.

For storage of HT, Huobi Corporation offers users the own development of Huobi Wallet. This is a multi-currency cryptocell , which can be used to store more than 1000 digital coins, including Bitcoin, Ethereum, Litecoin, Bitcoin Cash and other cryptocurrencies.

Huobi Wallet has mobile versions for Android and IOS devices. This is a convenient and secure wallet, where users have full control over their assets through personal security key management.

The application has a simple and stylish design. At the same time, users can manage their own account by adding new digital assets as needed.

In addition to a separate application, Huobi Wallet, you can also use the coin storage function on the Huobi exchange. The exchange offers “cold” wallets and protects the assets of its users with the help of two-factor authentication and an anti-DDoS complex.

From third-party applications for storing HT coins, you can use any wallet that supports ERC20 tokens. Among them are Jaxx, Exodus, MetaMask and others. And, of course, the well-known hardware wallets Ledger and Trezor can always help.

It is important to note that by choosing third-party wallets for storing their coins, users are automatically deprived of the right to receive privileges from using the Huobi Token cryptocurrency. Therefore, it is still preferable to use official Huobi applications for storing coins.

Course and Capitalization HT Token

Cryptocurrency Huobi Token started trading on exchanges with a rate of $ 1.49 at the beginning of February 2018. At first, the price of Huobi Token kept at about the same level and did not exceed $ 2.

The most noticeable jump in the HT price was at the beginning of the summer of 2018. After just 4 months, the level of popularity of the coins took off, which in turn affected the rate. At the beginning of June 2018, the HT rate reached its maximum and amounted to $ 6.10 for 1 token.

The dynamics of the course Huobi Token :

As of July 2019, the price of Huobi Token cryptocurrency is $ 4.18, and the project's market capitalization exceeds $ 208 million. Huobi Token's cryptocurrency is ranked 36th in the rating of cryptocurrency by the level of capitalization according to Coinmarketcap.com . At the same time, the average daily trading volume is close to $ 110 million, and this is still a pretty good indicator for cryptocurrency, which is just over a year on the market.

As can be seen from the graph above, at the current moment, the HT rate starts to rise slowly, so from the point of view of investing, the token becomes relevant again. The recent launch of a new product from the developers of Huobi Corporation – a platform for IEO called Huobi Prime, as well as parallel tokenale coins of the Top Network (TOP) – has sparked interest in cryptocurrency.

Despite the fact that the main purpose of HT – the use of traders for intramarket payments, the investment attractiveness of the cryptocurrency Huobi Token is also at a sufficient level. Most often, coins become an object for short-term investments, in particular, the activity of investors increases during the periods before the redemption of coins for the HIPF Fund.

Huobi Corporation does not stand still and regularly launches new products for its customers, thereby keeping users' interest in HT coins. In fact, HT is the embodiment of the success of the exchange, so while we are seeing a growth in capitalization and the development of Huobi, HT will also grow steadily.

Publication date 07/20/2019
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How is the Bitcoin rate and capitalization associated with Tether (USDT) steblcoin emissions?

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Rumors about the relationship between the price of Bitcoin and Tether (USDT) have been around for a long time, but how true they are, you can only speculate. The total number of tokens in Tether’s turnover at the moment is about $ 200 million, in preparation for reaching $ 4 billion.

When Tether’s market capitalization reached a new high of $ 4 billion, Bitcoin stopped falling and began to grow again. Conjuncture? Maybe, maybe not.

However, it is obvious that Tether released 50 million just at the moment when Bitcoin finished making its way out of the rising wedge model.

Guess what happened next? Hint: Bitcoin unfolds and adds 12% per hour.

Bitcoin has always grown in value with the new issue of USDT. On July 8, the price of BTC increased significantly after 100 million tokens were issued. The July 9 reversal was eliminated when Tether printed another 100 million USDT.

The same effect was observed on July 14th. However, an even more interesting observation could be made when Tether “mistakenly” released 5 billion USDT.

On this occasion, Bitfinex technical director Paolo Ardoino tweeted:

“When preparing a swap from Omni to Tron, there was a problem with the decimal numbers of the token. Token burning operations can be viewed below. ”

The resulting 5 billion USDT errors were burned in two stages: first 4.5 billion and another 500 million. Poloniex confirmed this information.

Nevertheless, the effect of this event affected the price of Bitcoin, since in less than 3 hours it fell by 8%, and over the next day it continued to drop by an additional 11%, which contributed to a decrease in the BTC price from $ 10,600 to $ 9 100.

This finally brings us to yesterday's 50 million USDT, as a result of the emission of which the price of bitcoin made a 180 ° turn and began to rise.

In addition, Tether is the main platform for bitcoins and other major cryptocurrencies . As can be seen from the graph below, approximately 3.56 billion of all USDT are directly sent to bitcoins, which is more than enough to control the price of the king of cryptocurrencies.

Thus, the observation of the influence of Tether on Bitcoin from July 8 to July 19 showed a direct relationship.

Publication date 07/20/2019
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Apple co-founder Steve Wozniak invested in the Maltese blockchain company

Stephen Wozniak acted as an investor in the Maltese blockchain-company EFFORCE, which is creating solutions aimed at the efficient use of energy resources. At the same time, he joined the EFFORCE co-founders, reports Malta Independent. Wozniak made a statement at the Delta Summit conference, which will be held in Malta for the second time in October. According to the source […]

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Stephen Wozniak acted as an investor in the Maltese blockchain-company EFFORCE, which is creating solutions aimed at the efficient use of energy resources. At the same time, he joined the EFFORCE co-founders, reports Malta Independent .

Wozniak made a statement at the Delta Summit conference, which will be held in Malta for the second time in October.

According to the entrepreneur who stood at the origins of Apple, energy efficiency has always been of great importance to him and that the blockchain will help reduce the consumption of energy resources without forcing people to abandon their usual ways of life.

Speaking about the EFFORCE company itself, Wozniak said that it offers a unique business model, part of which is an investment methodology offering new opportunities for entrepreneurs.

He also added that he had long wanted to invest in Malta, noting a positive environment for the development of new technologies, which was created by local authorities.

As stated on LinkedIn's EFFORCE page, the company offers a blockchain platform for investment in energy-efficient solutions, stating its intention to become “the world's first and foremost platform for tokenized energy-saving sources”.

Recall that last year it was reported that Steve Wozniak was related to the investment platform EQUI Capital, founded by the Scottish baroness Michelle Mont and businessman Doug Barrowmen. The company was going to raise $ 80 million through ICO, but failed to realize its plans.

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Name Price24H (%)
Bitcoin (BTC)
$10,797.00
2.94%
Ethereum (ETH)
$228.59
3.21%
XRP (XRP)
$0.334562
4.05%
Bitcoin Cash (BCH)
$330.96
7.50%
EOS (EOS)
$4.35
7.58%
Stellar (XLM)
$0.093973
2.67%
Litecoin (LTC)
$101.09
2.83%
Cardano (ADA)
$0.063855
5.62%
Tether (USDT)
$1.00
-0.09%
Monero (XMR)
$86.25
5.17%
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