Moscow District Court recently issued a sizeable penalty to Coinbase, a prominent crypto exchange in the United States. Approximately 1 million rubles were imposed due to Coinbase’s failure to comply with Russian law. The law mandates storing users’ confidential information on servers located within the federal territory of Russia.
The law, enacted in 2015, aimed to enhance Russian nationals’ data security and privacy. However, it also permits the government control over the internal distribution of digital information. It is important to note that Coinbase isn’t the solitary target of such legal action. Another global consortium, AIDA International, was also fined linking with this defy.
According to Article 13.11 outlined in The Code of Administrative Violations of the Russian Federation, the fine levied on Coinbase and AIDA International is minimal. However, the failure to comply with the associated law holds the possibility for penalties skyrocketing up to 6 million rubles.
High Tech Conglomerates Face Russian Court Penalties
This incident throws yet another log onto the fire of contentions between Russian authoritative frameworks and prominent international tech conglomerates. Notably, video conferencing software Zoom was slapped with a 15-million-ruble penalty, while the fundamental telecommunications app Telegram incurred a 50,000-ruble pronouncement related to the same digression.
However, Roskomnadzor, a Russian regulatory authority, has emphasized the necessity for data localization in Russia, firmly issuing an order demanding that Russian users’ databases on overseas servers be located within the nation’s borders.
They assigned a distinct deadline, signaling an assertive stance on this issue. Despite initiatives by international entities to act against this order, around 600 offices of foreign firms in Russia have surprisingly fallen into line, adhering to their intention.
This most recent activity shows the growing friction between Russia and the international cryptocurrency sector. While Russia’s goal is to manage and impede the use of these digital currencies, the cryptocurrency field, on the other hand, continues its endeavor to grow and initiate advancements.
Thus, fines imposed on foreign firms demonstrate a confrontation between national regulations and the digital landscape. It inevitably brings into light the intricate situations and obstacles that stand in the path of regulatory bodies and international organizations operating in Russia.
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