Russia blocks one of the largest running cryptocurrency exchanges, BTCe, following BitStamp’s voluntary IP block of its Russian users. These developments are likely a preview of what is to come from enforcement of recent laws criminalizing blockchain technologies and ‘money substitutes’ in the Russian market.
Russia Can’t Make Up its Mind on the Blockchain
More baffling still is the fact these moves to shut down Bitcoin exchanges are coming after last month’s announcement of a ‘clear road map’ to legalize cryptocurrency in Russia. This roadmap is a facet of a proposal to deregulate the IT sector called “internet program 2025.” Russian officials claim that only bitcoin, not blockchain technology, is illegal but refused the legal creation of a Russian altcoin, dubbed BitRubles, by payment processor Qiwi following the passing of this proposition.
Bitcoin ownership in Russia is a criminal offense that carries a maximum four-year sentence and up to 500,000 Rubles (~$19,000 USD.) As it stands, there’s no regulatory framework to enter the crypto market there legally despite conflicting stances of different Russian government bodies on the subject. With the enforcement and legislative sides of this issue seemingly headed in opposite directions, it’s hard to make sense of the crackdown on the online markets as it stands.
A possible explanation for the recent criminal enforcement measures could be the price drop of the Ruble due to falling oil and economic sanctions. The Russian central bank, vocally against Bitcoin and blockchain tech. in general, may be pushing for enforcement to prevent capital outflow that could worsen their situation. With no clear stance on Blockchain implementations outside of Bictoin, and no decriminalization efforts for bitcoin proper, legitimate Bitcoin ownership and investment remains difficult to impossible. Until there’s a compliant regulatory ecosystem for crypto in Russia, expect the situation to escalate accordingly.
What are your thoughts on the Russian treatment of bitcoin and of Cryptocurrency regulation in general? Be sure to let us know in the comments!
Image courtesy of beastcoins.com