Russia Backpedals On Cryptocurrencies

Alexei Moiseev, Russia’s deputy finance minister, has said that: “There is a point of view that such cryptocurrencies as bitcoin is a financial pyramid.”

In an interview with the state-owned Russian language television channel, Russia-24, Moiseev raised concerns from the Ministry of Finance. In particular, Moiseev alluded to two types of risks, one being a risk to consumers: “Now people do it at their own peril and risk, they have no judicial protection. This is our first task.” Moiseev also discussed the risks of money laundering and the inadequacies of current anti-money laundering mechanisms.

Further comments from Moiseev seemingly propose regulations for cryptocurrencies being allowed only for qualified investors. Moiseev further stated that this approach was discussed by the ministry of finance with both the Russian Central Bank as well as the Moscow Stock Exchange. Should such an approach be implemented, the sale of cryptocurrencies to private individuals could be banned in favor of alternatively selling cryptocurrencies via the Moscow Stock Exchange under the careful supervision of the Rosfinmonitoring.     

The deputy minister’s comments come on the heels of announcements by state-sponsored mining company, Russian Miner Coin (RMC), which is co-owned by one of Vladimir Putin’s internet advisors and has aims to raise the crypto equivalent of $100 million. RMC is largely believed to be an effort by the Russian government to challenge China’s bitcoin supremacy and help Russian entrepreneurs gain footholds in the technology.

While it remains unclear if the Russian government will act to prevent non-qualified investors from purchasing cryptocurrencies, if action is taken, it might resemble previous instances where the Russian government blocked websites for cryptocurrency exchanges. Previous comments from the Russian government about creating a national cryptocurrency, which would likely have more market freedom, provide some understanding of how cryptocurrency regulation is taking shape in Russia.  

Interestingly, Russian entrepreneur Pavel Durov took to his social media platform VK to comment on the remarks by Moiseev. Per Durov: “instead of seizing the chance to make the world more balanced and, together with Japan and other Asian countries, recognizing the status of the new digital currencies that are replacing the dollar, the voices of ‘let’s forbid and limit’ are heard from the Russian government.”