Cryptocurrency is Property in Russia, Justice Minister Confirms

Cryptocurrency is Property in Russia, Justice Minister Confirms

The Russian Ministry of Justice has taken side in what looks like a lively debate about the status of cryptocurrencies that are still unregulated in the country. A bankruptcy case involving a modest amount of bitcoin has sparked discussions in Russian legal circles. Some say a crypto is nothing more than “a set of characters.” Others, including the justice minister, are categorical – cryptocurrency can’t be anything else but property.   

Also read: Cryptocurrencies to be Called “Digital Money” in Russia, Tokens – “Digital Rights”

Russian Justice Ministry Takes Side in a Legal Argument

Cryptocurrency falls under the legal category of “other property,” Russia’s Justice Minister Alexander Konovalov told reporters this week. With two draft laws on the matter still pending in the State Duma, he also noted that digital coins should not be considered electronic money, at least on this stage.

A bankruptcy case involving some bitcoin holdings has recently stirred the Russian legal community, which was challenged to provide a provisional answer to the question about the status of cryptocurrencies. In the absence of firm definitions in the current legislation, this question split Russian legal experts in two camps. On one side are those who think that cryptocurrencies have real value, on the other – their colleagues who believe they don’t, if the law doesn’t explicitly say so.

Cryptocurrency is Property in Russia, Justice Minister ConfirmsAccording to Konovalov, his department has adopted a “consolidated opinion” on the legal nature of cryptocurrencies and it supports the view that they should be defined as property. “If digital money is not property, its theft would not be considered criminal offense because there would be no object of the crime,” he warned.

“If cryptocurrencies are to develop, additional regulation will be necessary. The main point is to ensure that all this does not grow into financial pyramids,” Konovalov added, quoted by Prime. He is convinced that Russia should introduce rigid crypto regulations but also recognizes that the phenomenon is itself a “manifestation of the people’s desire to escape from total dependence.”

The Question Will Be Answered by the Duma Soon

Minister Konovalov’s comments added to the ongoing debate among experts and officials in Moscow on whether cryptocurrency can be considered a property in accordance with the current Russian legislation. The discussions were prompted by a bankruptcy filing from October last year. During the arbitrage proceedings, the debtor protested the trustee’s request to include his crypto funds, less than 0.2 bitcoin (BTC), in his bankruptcy estate.

According to his legal representative, such move is impossible as the term “cryptocurrency” is not mentioned in Russia’s Civil Code at all. The Moscow Arbitration Court accepted this position. “A conclusion can be drawn that cryptocurrency is a certain set of symbols/characters contained in an information system. It cannot be an object of the civil rights,” it said.

Cryptocurrency is Property in Russia, Justice Minister Confirms

But then, earlier in May, an arbitration court of appeals overturned this ruling recognizing cryptocurrency as a valuable property, as news.Bitcoin.com reported. On Thursday, the Ninth Arbitration Court of Appeals published its decision on the case. According to the document quoted by Interfax, cryptocurrency cannot be regarded as anything else but property. And, since the current civil law does not contain the notion “other property”, the widest possible interpretation of property is permissible, the court explained.

The question about the status of cryptocurrencies in the Russian Federation will be answered very soon. Two drafts have been filed in the Duma, the lower house of Russia’s parliament, and the one that focuses on legalizing initial coin offerings will have its first reading on Tuesday, May 22. The second bill is expected to amend the country’s Civil Code in order to regulate crypto payments. According to comments made by the Russian Prime Minister Dmitry Medvedev this week, the new legislation will refer to cryptos and tokens as “digital money” and “digital rights”, respectively. Whether this means that bitcoin will be accepted both as currency and property remains to be seen.

Do you expect Russia to eventually accept and legalize decentralized cryptocurrencies? Share your thoughts on the subject in the comments section below.    


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Cryptocurrency Recognized as Valuable Property by Russian Court

Cryptocurrency Recognized as Valuable Property by Russian Court

A Russian arbitration court of appeals has recognized cryptocurrency as a property with value in its ruling on Monday. This overturned a previous ruling by another court even though Russia currently has no legal framework for cryptocurrencies.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Crypto Recognized as Property

Cryptocurrency Recognized as Valuable Property by Russian CourtThe Ninth Arbitration Court of Appeals ruled on Monday that a bankrupt person’s cryptocurrency must be included in the debtor’s bankruptcy estate, local media reported.

The case involves Russian citizen Ilya Tsarkov who filed bankruptcy in October last year. The court has ordered his cryptocurrencies to be transferred to the trustee, Alexei Leonov, who is expected to be handed the private key to the crypto wallet belonging to Tsarkov soon. According to Vedomosti, Tsarkov owns almost 0.2 bitcoin which is worth approximately US$1,885 at current market rates.

“The cryptocurrency was first recognized as property in Russia,” Ris Novosti reported. Leonov commented that with this ruling:

The court indirectly recognized the cryptocurrency as property and recognized its value.

Court Recognizes Crypto

Prior to Monday’s ruling, the case was heard in February by the Moscow Arbitration Court, which ordered Tsarkov to disclose his cryptocurrency holdings after he revealed to the bankruptcy trustee that he had a wallet at Blockchain.info.

Cryptocurrency Recognized as Valuable Property by Russian CourtLeonov requested the court to order the transfer of Tsarkov’s cryptocurrencies into the bankruptcy estate, but the court rejected his request at the time, stating that cryptocurrency cannot be used to pay creditors since “the laws of the Russian Federation do not recognize cryptocurrency as property.”

However, with Monday’s ruling, the Ninth Arbitration Court of Appeals overturned the judgment of the Moscow Arbitration Court after Leonov appealed. Russian Legal Information Agency Rapsi conveyed the court’s explanation:

Currently Russian legislation does not provide the definition of cryptocurrency and there are no requirements for its circulation. There is no way to tell if it is property, information or a ‘surrogate’…it is impossible to regulate the relations involving cryptocurrency.

Leonov cited “the position of the European Court of Human Rights on the issue of property and a bankruptcy case in Japan, where a court permitted to sell the debtor’s cryptocurrency,” the agency noted. “The lower court should have taken into account modern economic realities and new information technologies…bad-faith parties could exploit the fact that cryptocurrencies were excluded from bankruptcy estates by converting their assets and thus rendering them inaccessible,” he reportedly conveyed.

What do you think of the court’s ruling? Let us know in the comments section below.


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Tax Time is Here and Lots of Cryptocurrency Holders Don’t Care

Tax Time is Here and Lots of Cryptocurrency Holders Don't Care

In the U.S. tax season has arrived and many American cryptocurrency proponents are squirming because they have to pay for some of the gains they made last year. However, there are a lot of digital currency holders who could care less about taxes and they strongly believe that taxation is antithetical to cryptocurrencies. While there is a good portion of digital currency holders planning to file their gains and losses, many crypto-advocates don’t plan to pay their tax liabilities.

Also Read: Blockchain Mining Completes Bitfarms Merger, Stock Jumps 49%

Cryptocurrency Taxes: Not Many People Pay Them

If you’re a cryptocurrency enthusiast then over the past few weeks you’ve probably seen a lot of articles on paying cryptocurrency taxes, how to pay them, and the horror stories involved with those who have to pay taxes on every transaction because — every single one is a taxable event in the U.S. Even though lots of people believe the Internal Revenue Service’s (IRS) classification is unjust by defining cryptocurrencies as a property rather than a currency, people still are forced to pay for their cryptocurrency gains. Just recently there’s been a multitude of reports on cryptocurrency taxation, and some of them explain that a lot of cryptocurrency proponents don’t seem to care about paying their digital asset taxes.

Tax Time is Here and Lots of Cryptocurrency Holders Don't Care
Tomorrow, taxes are due for American citizens, and there’s a good portion of cryptocurrency holders not willing to pay digital currency capital gains.

Jagjit Chawla, the general manager of Credit Karma Tax explained this week that out of 250,000 individuals who claim to hold cryptocurrencies like bitcoin less than 100 people (0.0004%) reported their gains to the IRS.

“There’s a good chance that the perceived complexities of reporting cryptocurrency gains are pushing filers to wait until the very last minute,” explained Chawla.

Further a recent Pollfish conducted Lendedu survey of 1,000 U.S. residents who own cryptocurrencies revealed that 35.87 percent of respondents answered, “No, I do not plan on reporting gains or losses on my tax return” The news also follows the recent IRS Coinbase investigation that reported on how there are millions of Coinbase customers, but less than 900 individuals per year reported their taxes over the past few years.

Salty Tax Paying Bitcoiners Get Mad at ‘Tax Cheats’

The articles reporting on people not paying their cryptocurrency tax obligations has got a bunch of bitcoin users ‘salty’ this past week. One individual on the Reddit forum /r/bitcoin says that “tax cheats” are smearing the good name of bitcoin owners.

“This is just another way to try and defeat Bitcoin. Nobody likes a tax cheat. Convince the country that BTC holders don’t pay their taxes, and before you know it, you have large numbers of people against them,” explains the post on April 16 the day before tax obligations are due in the U.S.  

I personally pay my taxes on BTC. It’s not an anonymous currency, and one day, (the IRS can look back seven years) you may get caught. If regulation forces exchanges to hand over all of their customer data, everyone who didn’t pay will be in for a wild ride.

‘Without Projects That Express Principles, You Have Nothing of What You Want With a Revolution’

However, the individual who wrote that post didn’t get the support he was looking for as many of the comments declared that “taxation is theft.” One person who specifically disliked the phrase ‘tax cheats’ in the post writes:  

Even the term ‘tax cheating’ is a fallacy itself, implying people voluntarily agreed being taxed and are backing out of their agreement or smt. If I live in a county where politicians can raise taxes without consulting the parliament or making a referendum who is cheating who? Because I FEEL it’s us the people who are being cheated into paying more taxes.

Another person details their issue with the post, “The financial system now is the problem — My government is a warmongering fascist state — F#&$ paying taxes in this shit hole!

Tax Time is Here and Lots of Cryptocurrency Holders Don't Care
Many cryptocurrency advocates follow Libertarian philosophies which believe that ‘taxation is theft.’

It’s safe to say that cryptocurrencies and taxes are very topical conversations, and the subjects often gets people upset. A large majority of the comments on the ‘tax cheat’ post disagreed with the person who wrote his opinion that tax cheats smeared the reputation of tax-paying citizens. There are a lot of cryptocurrency proponents who are also adamantly against paying taxes, and many of them are vocal about spreading the message that ‘taxation is theft’ over the years. 

“Without a big expression of intentionality to what is considered not the ‘polite things to do with bitcoin’ — specifically money laundering, specifically private access to your coin, holding your own keys — without projects that express these principles, you have nothing of what you want with a revolution — This leaves me to proclaim that most people involved with bitcoin were not serious about that in the first place,” Defense Distributed founder Cody Wilson explains in a 2015 interview.

What do you think about cryptocurrencies and taxes? Let us know what you think about this subject in the comments below.


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Australian Tax Agency Seeks Public Input Concerning Cryptocurrency Taxes

Australian Tax Agency Seeks Public Input Concerning Cryptocurrency Taxes

The Australian Taxation Office (ATO) has been researching how to formulate regulatory guidelines for taxing cryptocurrencies recently. This week the ATO is seeking input from Australian residents concerning how the country should tax digital assets.

Also read: South Korean Exchange Paying Users to Report Illegal Crypto Schemes

The Australian Taxation Office is Looking for Public Opinion Concerning Cryptocurrency Tax Implications

Over the past few months, the ATO has been drafting taxation guidelines for cryptocurrencies like bitcoin. The Australian tax agency has already described how it wants citizens to record all of their digital asset transactions and document the Australian dollar value amount at the time of each transaction. The ATO’s “Seeking Input” letter details its recently defined descriptions “resulted in queries from the community about how to approach specific tax events.” In order to deal with these requests, the ATO is asking for public opinion concerning crypto-tax laws.

“We have launched a community consultation to help us understand practical issues experienced when complying with cryptocurrency tax obligations,” explains the ATO.

We’ve timed this consultation to coincide with an update to our website, which should address some of the feedback we have received to date about our cryptocurrency guidance.

Australian Tax Agency Seeks Public Input Concerning Cryptocurrency Taxes

Public Feedback Must be Submitted by April 20

Australian Tax Agency Seeks Public Input Concerning Cryptocurrency TaxesThe recent letter follows the ATO’s creation of a special task force dedicated to tracking and identifying cryptocurrency transactions. Furthermore, the tax agency has partnered with the Australian Transaction Reports and Analysis Centre (Austrac) alongside other government bureaus. At the time the ATO detailed the agency’s strategy is meant for people to understand the “tax implications of cryptocurrency arrangements.”

This week the ATO’s letter explains it looks forward to hearing from the public.

“We’re eager to hear your feedback about cryptocurrency and its tax implications as the technology may impact how business operates in the future,” the agency adds.

Australian citizens who want to participate in giving public feedback can do so until April 20, 2018. Those who wish to make comments can visit the ATO’s consultation of substantiating cryptocurrency taxation events webpage.

What do you think about the ATO asking for public feedback concerning crypto-tax implications? Let us know what you think in the comments below.


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Venezuelans to Buy Homes and Property with State Cryptocurrency

Venezuelans to Buy Homes and Property with State Cryptocurrency

Venezuelans will be able to buy houses and other property with their new national cryptocurrency. Real estate deals in petro will be authorized in April, President Maduro announced. The government will also finance the construction of 230,000 new homes using funds from the pre-sale of the oil-backed crypto.  

Also read: Rubles Can Buy You Petro Maduro Says While Denominating Venezuela’s Currency

Four Economic Zones to Accept Petro Payments

All citizens and legal entities in Venezuela can now buy the national cryptocurrency through its website and soon they will be able to spend their petros as well. Sales of real estate in the oil-backed crypto will be allowed from April 20, Nicolás Maduro said, quoted by Noticia al Día.

Venezuelans to Buy Homes and Property with State CryptocurrencyThe Venezuelan president also revealed authorities will create four special and exclusive economic zones to stimulate the circulation of the petro. They will be located in Los Roques, Paraguaná, Ureña and on the Margarita Island. Goods and services there will be priced in the new government-issued cryptocurrency.

Last month Maduro authorized all savings banks in the country to use the petro, as news.Bitcoin.com reported. Later he said all state institutions engaged in foreign exchange had been instructed to do the same.

Maduro announced that more than 200,000 orders from 133 countries have been placed during the 30 days of the petro pre-sale. He told local TV the total of the orders amounts to $5.25 billion USD. The president also said petros can now be purchased with fiat currencies like Russian rubles, Chinese yuan, Turkish lira and euro, as well as with cryptocurrencies like bitcoin, ethereum and NEM.

Three Million Homes to Be Built With Petro

Earlier this week Venezuela’s head of state said 82.5 million petros had been sold since the launch of the national cryptocurrency in February. The socialist government in Caracas intends to use some of the $735 million collected from the pre-sale to finance the construction of 236,000 new homes.

Venezuelans to Buy Homes and Property with Petro

Authorities plan to build a total of 3 million housing units by 2019 under the Grand Housing Mission launched in 2011. Their construction will be financed with funds from the sale of the oil-backed currency. A presidential decree is expected to allocate 14,000 hectares of government-owned land to the project.

Nicolás Maduro reiterated his rejection of the new sanctions imposed by the White House. US President Donald Trump recently signed an executive order banning American citizens and legal entities from any transactions with Venezuelan cryptocurrencies. “Venezuela repudiates the measures against the petro,” Maduro said adding that they were intended to harm the country’s economy.

Venezuela will also host another global blockchain and cryptocurrency technology event, its president announced. The conference will be held mid-April in Caracas.

Do you think Maduro’s administration will be able to successfully introduce the petro in other sectors of Venezuela’s economy? Share your thoughts in the comments section below.  


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The Wealthy Want Crypto but Don’t Understand It, Survey Shows

The Wealthy Want Crypto but Don’t Understand It, Survey Shows

The world’s richest people are putting more and more money into cryptocurrency, despite the fact they don’t understand it very well, a new report reveals. Terms like “distributed ledger” and “blockchain” are not especially familiar to the wealthy, according to their advisers. The widespread misunderstanding about the technology behind bitcoin seems to have little or no effect on the attractiveness of crypto investments however.   

Also read: More Belarusians Search “Crypto”, Question “Legalization”

Advisers Confirm Interest in Cryptocurrencies

Cryptocurrencies have caught the attention of rich people around the world, but that does not necessarily mean they understand very well what cryptos really are. About 21% of the respondents in an annual survey of wealth advisors and private bankers confirmed their clients increased investments in cryptocurrencies last year. The lack of understanding of the technology behind bitcoin – distributed ledger – is one of the findings of the latest Wealth Report by Knight Frank.

“We asked about their understanding of blockchain and there is still a huge amount of misunderstanding about it,” Knight Frank’s Head of Research for Asia-Pacific, Nicholas Holt, told CNBC this week. “Although people are getting on the train about investing in cryptocurrencies, perhaps there is not a full understanding of what this could mean to their wealth portfolio,” he noted.

The Wealthy Want Crypto but Don’t Understand It, Survey Shows

Despite the crypto craze, interest towards traditional investments, like stocks and properties, remains high and they are still preferred by the wealthy, according to the report. Experts are not surprised by that finding, as 2017 has been a good year for equities.

At the same time, property remains the cornerstone of most portfolios, accounting for up to 50% of investments in the Asia-Pacific region. 34% of the respondents globally have confirmed intentions to invest in property overseas in 2018. The US and UK are the top markets, Nicholas Holt said. American commercial and residential markets are expected to grow following tax reforms there.

Increased Exposure to Crypto Assets

The annual Wealth Report includes performance data for 100 key luxury property markets. It provides a global perspective on prime property and wealth, its authors from the property consultancy firm claim. The document also includes the results of the Attitudes Survey and Knight Frank’s Global Cities Index.

The Wealthy Want Crypto but Don’t Understand It, Survey ShowsThe survey was conducted at the end of last year, when rising prices on cryptocurrency markets catalyzed interest in exposure to crypto assets. The price of bitcoin reached all-time highs in 2017, approaching the $20,000 USD mark in December.

Interest in cryptocurrency investments vary according to different markets and periods. Generally, it seems much more dependent on positive and negative perceptions about future market developments and regulatory risks than on other factors such as the level of knowledge and understanding.

Recent surveys, including in countries like the US and Russia, have indicated increasing awareness of bitcoin and other cryptocurrencies. The comprehension of the underlying technology and the understanding of related terms, however, remains superficial.

Do you expect the wealthy’s share of cryptocurrencies in investment portfolios to increase in the near future? Share your thoughts in the comments section below.


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Court Will Not Seize Crypto as Debt Payment from Bankrupt Citizen in Russia

Court Will Not Seize Crypto as Debt Payment from Bankrupt Citizen in Russia

The Moscow bankruptcy court has ruled that cryptocurrencies of a bankrupt debtor will not be seized to pay his creditors. The trustee for the case has failed to convince the judge to include the debtor’s cryptocurrencies in the bankruptcy estate.

Also read: Indians Look to Buy Bitcoin Overseas as Regulations Tighten

Court Rejects Crypto in Bankruptcy Estate

The Moscow Arbitration Court ruled this week that cryptocurrency cannot be used to pay creditors in the bankruptcy case of Russian citizen Ilya Tsarkov, who filed bankruptcy in October of last year.

Court Will Not Seize Crypto as Debt Payment from Bankrupt Citizen in RussiaInterfax reported from the courtroom that the appointed trustee for the case, Aleksey Leonov, proposed “to collect [Tsarkov’s] digital savings as a debt payment.” He claimed that cryptocurrency “is definitely an asset that can be sold,” adding that it will not contradict the country’s current legislation, the news outlet detailed, as translated by Crime Russia.

While Leonov “insisted on the inclusion of digital currency in the bankruptcy assets,” the publication elaborated that “the court noted that the laws of the Russian Federation do not recognize cryptocurrency as property.” The court therefore “refused to include cryptocurrency discovered on the accounts of insolvent Ilya Tsarkov in the bankruptcy assets,” the news outlet wrote, adding:

The court did not agree with the Leonov’s position. As they indicated in the decision, the concept of cryptocurrency is not set out in the current legislation, which does not allow to recognize digital money as property and, thus, include it in the bankruptcy assets.

Crypto Not Recognized by Russian Law

Tsarkov reportedly voluntarily disclosed having a crypto wallet with Blockchain.info, but opposed the seizure of his cryptocurrencies, citing that “Russian legislation does not consider cryptocurrency assets as property, [so] it is impossible to foreclose on them,” Interfax noted. Earlier this month, the court ordered him to disclose his cryptocurrency holdings, following the request by Leonov.

Court Will Not Seize Crypto as Debt Payment from Bankrupt Citizen in RussiaTsarkov’s representative at the court also stressed that cryptocurrency is not part of the Russian Civil Code. “The legal regime of the cryptocurrency is not given in any legal act, the cryptocurrency is information that can not be included in the bankruptcy mass,” he was quoted by Interfax.

Kommersant recently reported that the Russian Ministry of Economic Development and the Federal Financial Monitoring Service (Rosfinmonitoring) both believe that:

The lack of a statutory financial status of digital financial assets does not yet allow them to be used in bankruptcy proceedings.

What do you think of the court’s decision? Let us know in the comments section below.


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Russian Bill Requires Deputies to Declare Their Cryptocurrency Investments

Russian Bill Requires Officials to Declare Their Cryptocurrency Investments

The bill for the regulation of cryptocurrencies in Russia submitted by the finance ministry and the central bank requires State Duma deputies to declare their cryptocurrency investments. Currently, government officials are not required to declare their crypto holdings, according to a recent announcement by the Russian Ministry of Labor.

Also read: Cryptocurrency Activities Will Be Legal and Tax Free in Belarus Starting in March

Bill Requires Declaration of Crypto Holdings

Russian Bill Requires Officials to Declare Their Cryptocurrency Investments
Anatoly Aksakov.

The chairman of the State Duma Committee on Financial Markets, Anatoly Aksakov, explained last week that Russian officials will be required to declare their cryptocurrency holdings under the bill recently submitted by the central bank and the ministry of finance.

In this bill, which is expected to be ready in February, the finance ministry proposed treating cryptocurrency as “other property,” as news.Bitcoin.com previously reported.

In an interview with Gazeta, Aksakov revealed that if the bill is adopted, “officials will be forced to indicate their cryptocurrency [holdings] in their income statements,” the news outlet conveyed. “This will automatically happen with the adoption of the law on the definition of cryptocurrency,” he added, noting:

If the law prescribes that this [cryptocurrency] is property, then any property owned by a State Duma deputy must be declared.

While Aksakov claims that he does not own any tokens or cryptocurrencies so the law will not affect him personally, he believes that “it is in the interest of the state to justify the rules that define cryptocurrency as property.”

Russia is not the only country to submit legislation requiring lawmakers to declare their crypto holdings. Earlier this week, news.Bitcoin.com reported that a South Korean lawmaker introduced a bill to require government officials to declare their cryptocurrency possessions. In August 2016, three Ukrainian lawmakers declared their bitcoin holdings worth $47 million.

No Declaration Required Currently

Russian Bill Requires Officials to Declare Their Cryptocurrency InvestmentsEarlier this month, the Russian Ministry of Labor announced that state employees do not have to declare their cryptocurrency holdings. The income declaration form “does not provide for the indication of goods, services received in kind, as well as virtual currencies,” Tass quoted a document on the ministry’s website. This is the first time cryptocurrency is mentioned in “the updated recommendations on the declaration of income of officials,” Izvestia described.

Aksakov told Gazeta that there are two bills. The first lays out the regulatory framework for cryptocurrencies, initial coin offerings (ICOs), and crypto mining. The second regulates crowdfunding. It includes procedures that “should be implemented in the case, for example, of the bankruptcy of an organization that issued tokens to attract investments for the implementation of a project.”

The finance ministry is also working on a bill to legalize cryptocurrency trading on approved exchanges, as news.Bitcoin.com previously reported. Commenting on whether the ministry of finance or the central bank will eventually support cryptocurrency trading at exchanges, Aksakov revealed:

The central bank is very cautious about this, but I think that we will nevertheless follow a faster path than the central bank expected. Since there is a phenomenon, we are unlikely to prohibit it. And if we do not resolve it, then we will drive people into criminal activities.

Do you think Russian officials should have to declare their cryptocurrency holdings? Let us know in the comments section below.


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Chronext raises $34 million to bring nice watches to your bare wrist

 There are a number of services that let you sell your used watches or simply purchase new watches but few have the funding war chest of Chronext. This online services lets you buy and sell fancy watches for a fraction of the price and, as evidenced by their performance and the performance of competitor Crown and Caliber, it looks like that market is heating up. Created by Philipp Man and… Read More