BitcoinPolitics

Russia Clamps Down on Bitcoin-Related Websites Again

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Russian media watchdog (Roskomnadzor) has blocked the popular Russian currency exchange monitoring website bestchange.ru again. 

The free website assists users in finding the best rates for exchanging currencies and was launched in 2007. Bestchange.ru was first blocked in 2017 and again in March 2019. It was issued its third notice on August 26, 2020. However despite being black-listed, users are still accessing the website through VPNs, browser extensions, and mirrored sites.

Other Bitcoin-related websites that were included in the notice included prostocoin.com, cryptorussia.ru, and even the online flower shop lavka-flowers.ru. The most notable reason cited for the recent action in the Kotlassky court city order involves the introduction and use of a new currency other than the ruble inside of Russia:

Article 75 of the Constitution of the Russian Federation provides that the monetary unit in the Russian Federation is the ruble. The emission of money is carried out exclusively by the Central Bank of the Russian Federation. The introduction and issue of other money in the Russian Federation is not allowed.

Judge Ropotova Elena Viktorovna

Specifically, the court found the websites guilty of allowing the purchase of goods or services using Bitcoin. 

The court also stated that allowing the use of Bitcoin for payments violated Federal Laws as “the process of issuing and circulating bitcoin is completely decentralized and there is no possibility of its regulation.” Furthermore, the intent behind the ban was to prevent the “financing of terrorist and extremist activities” with Bitcoin.

This is not the first time the narrative of Bitcoin being used for illicit purposes has been promoted by Russian officials. Sergi Shvetsov, the First Deputy Governor of the Bank of Russia shared a similar sentiment on July 28, 2020 during a YouTube livestream:

The Bank of Russia, as a regulator, adheres to the position that crypto purchases are not an investment. it is more like a financial pyramid or roulette games, and does not apply to the financial market. either government or financial intermediaries should not encourage citizens to acquire cryptocurrencies.

Sergei Shvetsov

Future of Bitcoin Regulation in Russia Still Uncertain

This most recent action taken by the Roskomnadzor comes on the heels of a recently signed bill “On Digital Financial Assets” in July 2020. This new law signals a more optimistic outlook for cryptocurrency regulation in Russia as it departs from its previous stance of a total cryptocurrency ban

The law allows banks to open up cryptocurrency exchanges and issue new digital currencies under the supervision of Russia’s Central Bank. It also legalizes the status of cryptocurrencies but prohibits its use as a form of payment for goods and services.

However the blocking of Bitcoin-related websites such as bestexchange.ru, which simply mentioned the word Bitcoin and didn’t sell it, suggests continued regulatory uncertainty moving forward.

The bill “On Digital Currency” by the State Duma is expected to provide a thorough regulatory framework on digital currencies this coming December.

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Andrew Yang is a researcher obsessed with Bitcoin and the Lightning Network.