Agents working in the Russian Federal Security Service (FSS) have been instructed by their departments to persuade the Government that FSS should be empowered so that it could ask for submission of crypto data directly from the companies involved in the crypto business. FSS believes that empowerment is necessary because of the amendments that have been made into the anti-corruption law.
Russian FSS has come to believe that when it comes to crypto, the security service, as well as its agents, is powerless. FSS lacks the power over crypto companies and feels that it requires power on an urgent basis. For instance, if FSS’s agents require some information from crypto companies, they cannot do so directly. For this, FSS has been instructing its agents to persuade the Russian Government to give them the power they seek. The security service department believes that its agents cannot prevent corruption if they are powerless.
In this context, FSS has prepared an order the department has already published. The department is now seeking public opinion on the draft order. It was also told by FSS that if anyone has any recommendations for the department, then that would be appreciated as well.
The contents of the draft order suggest that once the power is given to the agents of FSS, then they can act efficiently. For example what happens now is that if agents require any information from crypto companies, they have to first seek permission from other authorities. By the time the permission is granted, it is already too late for them to act and prevent the crime. If the power is given to FSS, then the agents would seek such permission from their department instead of going to other authorities. This will save a lot of time and, at the same time, the agents would be able to act as quickly as possible.
Usually, the FSS is liable to obtain permissions from governmental authorities including tax and credit organizations. It simply cannot act on its own if it requires information from crypto companies which jeopardizes the process of inspection.
FSS has come into motion for seeking power soon after the anti-corruption law was amended recently. In addition, under another law, Russian lawmakers have declared virtual currencies as “assets”, however, the law will come into force in 2022. This would mean that the virtual currencies and/or virtual assets will enjoy the status of being a “property”. Therefore, the Russian taxpayers would be liable to show their crypto holdings in the due income tax statements of each year.
For the time being FSS’s order is going through public consultation process and after that it will be considered by government machinery. If the order is permitted, then crypto platforms would be duty-bound to give the required information to FSS for inspection and scrutiny.