Crypto Business in Belarus
The legal system of the cryptocurrency regulation began to operate in Belarus from March 2018, with the entry into force of the Presidential Decree No. 8 of December 2, 2017 “On the Development of the Digital Economy”. The technology of transactions (blockchain) was introduced into the economy, and the cryptocurrency was defined as bitcoin, another digital sign (token) used in international circulation as a universal means of exchange. In October 2018, the Hi-Tech Park adopted the legal acts specifying the provisions of the Decree.
In the sphere of cryptocurrency circulation in Belarus it is possible to carry out:
activity of the operator of crypto platform – providing the ability to make transactions using the information system to legal entities and individuals, including non-residents of Belarus, both among themselves and with the operator: this is organization of bidding (disposal, purchase of cryptocurrency for Belarusian rubles, foreign currency, electronic money; exchange of cryptocurrency), organization and transactions on cryptocurrency placement; transactions with cryptocurrency outside its trading system; transactions with cryptocurrency in the interests of clients on the basis of intermediary agreements; other transactions;
activity of the cryptocurrency exchange operator is the exchange of one cryptocurrency type for another cryptocurrency type, its purchase, sale for Belarusian rubles, foreign currency, electronic money and it is carried out using cryptomats – the information systems and (or) software and hardware systems operating in self-service mode. (Unlike the operator of the crypto platform, it is carried out solely in its own interest, on its own behalf);
activity of the ICO organizer is the provision of services related to the creation and placement of digital signs on the Internet, their promotion, consulting and other related services;
other activities, including containing signs of professional and exchange activity on securities, activity of the investment fund, securitization.
These activities are not banking activities. Until January 1, 2023, the residents of the HTP are completely exempt from taxation of cryptocurrency transactions.
The residence in the HTP is a condition of implementation of activities. This requires creating a legal entity (hereinafter – LE), to submit to the HTP Administration a business project and documents confirming compliance with the requirements, one of which is the auditors’ report “The Big Four”: PricewaterhouseCoopers, Deloitte Touche Tohmatsu, Ernst & Young, KPMG. In the subsequent the audit is carried out by one of them at least once a year.
Requirements for the implementation of crypto business are as follows:
The operators of crypto platforms are obliged to ensure the availability of funds in the amount of at least 1 million Belarusian rubles in the accounts of the banks of Belarus; cryptocurrency exchange operators – at least 200 thousand Belarusian rubles; ICO operators – at least 500 thousand Belarusian rubles.
It should be applied the international measures to combat money-laundering (AML), combating financing of terrorism (SFT) by identifying and verifying the customers, conducting financial transactions (KYC –“know your client”, for example through Web-ID); it is carried out regularly check the sources of cryptocurrency by tracking chains of transactions using software of the companies Elliptic, Chainalysis, Coinfirm (United Kingdom); Neutrino (Italy) or more efficient; work risks assessment with clients by a client profile, geographical region and types of operations with the possibility of freezing funds, blocking a financial transaction or refusal (for example, with full anonymization); sending information about such operations to the Financial Monitoring Department of the State Control Committee; it should be developed an appropriate policy, appointed a responsible person, checked the knowledge of the employees.
Protecting personal data
It should be developed technical, program and organizational measures (rules for handling personal data, application of information security tools, identification of responsible persons, restriction of the number of persons having access to the system) which corresponds to the level of the European regulation of the GDPR.
Requirements for investors and key employees
Absence of a criminal record for economic crimes and crimes against information security; absence of a court decision on the implementation of actions that led to bankruptcy within three years; absence of termination of the employment contract on guilty grounds within two years. Investors should also not be in arrears in payments to the budget of Belarus and the country of residence; in case of ownership of 10% shares of the HTP resident is not under sanctions of the UN Security Council; they must disclose information on the results of court sessions with their participation for three years.
It is compulsory to have the position of AML compliance officer in the organization.
Individuals (I) in the cryptosphere have the right:
to own digital signs, store them in virtual wallets, give and bequeath;
to exchange, purchase, alienation for Belarusian rubles, foreign currency, electronic money;
to carry out mining – to become the owner of digital signs that have arisen (produced) as a result of its activities and receive digital signs as a reward for verification of transactions in blockchain. This type of activity is not entrepreneurial.
Individuals are fully exempt from cryptocurrency taxation until January 1, 2023.
Thus, Belarus is the first country in the world that has legally regulated activities in the field of cryptocurrency. The legitimacy of the cryptocurrency business, developed infrastructure in the form of the High-Tech Park and one of the world’s best IT communities make this area very attractive for investment.