Russia Backpedals On Bitcoin - Unveils Plan To Ban Cryptocurrency Sales To "Ordinary People"

After local Russian media reported earlier this year that the Russian Parliament could legalize bitcoin as soon as 2018, Deputy Finance Minister Alexei Moiseev this week signaled that authorities might instead seek to restrict its use. During an interview with Russia 24, a state-owned news channel, Moiseev said that Russian authorities should treat cryptocurrencies, including bitcoin, as sophisticated financial assets and restrict their use and trading to qualified investors only.

Moiseev’s statement surprised members of Russia's digital currency community, who had been lead to believe that the Russian government was finally warming to digital currencies after years of skepticism. That belief was strengthened earlier this month when an aide to Vladimir Putin announced that he would seek to raise $100 million to build bitcoin mining infrastructure in Russia, with the goal of controlling as much as 30% of the bitcoin network’s hashpower.

“’Cryptocurrency should be regulated as a financial asset,’ Vedomosti reported him saying. ‘There is a point of view that cryptocurrencies such as bitcoin is a financial pyramid. Investments [in] such are high-risk. This determines our approach to their regulation.’

 

RBC quoted him saying: "We propose to call it a currency, but regulate it as other property, qualify it as a financial asset and allow only qualified investors to buy and sell them on the exchange.

As a regulated financial security, Moiseev said cryptocurrencies would be sold through stock exchanges under the supervision of the Federal Financial Monitoring Service of the Russian Federation, also known as Rosfinmonitoring, according to Bitcoin Magazine.

Moiseev added that bitcoin is a "dangerous" investment, and that it's the government's duty to protect "ordinary people" from losing their shirts, according to CoinTelegraph.

“For ordinary people, there’s no way because these are very dangerous investments that could lead to loss of money.”

According to Moiseev, Russia’s ministry of finance is discussing how to proceed with the central bank and the Moscow stock exchange. Moiseev added that it is necessary for cryptocurrencies to sell through the exchange “to provide judicial protection to participants in transactions.”

Moiseev detailed that this approach to cryptocurrency regulation aims to protect the rights of buyers and sellers. “Now people do it at their own peril and risk, they have no judicial protection. This is our first task,” he was quoted by Vedomosti.

His comments then turned to the subject of money laundering.

“Citing Western Europe and Russia in particular, Ria Novosti quoted him saying “the use of cryptocurrency for illegal operations has become much more frequent because the mechanisms for combating money-laundering are not yet fully applied in all countries to cryptocurrencies.”

Finally, Moiseev said that the Russian government is uncomfortable with the anonymity provided by bitcoin.

“Moiseev also explained that it is necessary to sell bitcoins through the regulated stock exchange, so that the regulator will always know ‘who the seller is, who the buyer is, where these bitcoin accounts have moved.’”

What's worse for bitcoiners is that Russia might be at the vanguard of a shift in how authorities view bitcoin. The SEC late last month declared that digital currencies, including bitcoin and the tokens issued during ICOs, should be treated as securities under the law.

So far, the SEC's guidance has been vague. But the ease with which digital currencies could be used to finance illicit activities – regardless of whether they’re actually being used for that purpose – likely means that more government crackdowns are ahead. By requiring all local bitcoin exchanges to screen transactions for potential violations, China has found a way to pierce the anonymity surrounding digital-currency transactions.

Don’t think it can't happen in the US.

Comments

Vilfredo Pareto Sep 3, 2017 2:42 PM Permalink

Bitcoin isn't safe for ordinary people. Translation.  Fuck off serfs.  We can't let you control your financial destiny beyond our prying eyes.  We make the rules around here.  

order66 Aug 30, 2017 4:41 PM Permalink

Yeah, Russian fraud banks setup by Putin's inner circle of crooks don't like crypto.Hey ZH, why not a single story on Otkritie?Complete corrupt fraud bank directly tied to Putin and bailed out by the state.Very telling.

explosivo Aug 30, 2017 3:50 PM Permalink

Translation: Putin is buying bitoin for his personal portfolio. When he is done accumulating there will be a new announcement about how he has changed his mind and now supports bitcoin. 

Weirdly Aug 30, 2017 11:05 AM Permalink

Why try to make it more complicated than it is?  Russia is the same as every government.  The men that make up government print currency out of thin air and transfer it to friends in exchange for kick backs. Any volume they lose to bitcoin leads to a loss of their power.  In time they may lose it all.  Now is the time for them to take steps to limit their loss of influence.  It is not complicated.  They see their system collapsing in the far out future and are taking steps to slow that down.

Momentarily Lucid Aug 30, 2017 7:31 AM Permalink

A Governments attitude towards control of their populace is often reflected in their attitude towards crypto 'currencies'.Unfortunately for them, peer to peer transactions, communication and networks are here to stay whatever they might like to legislate against.Any Country that attempts to ban cryptos will be left completely behind in the fourth industrial revolution. Their banker backed Goverments know it, and are wringing their hands in anguish.Just like you are using PHP right now and are totally unaware of doing so, the next gen secure machine to machine protocol will be on every new device.Try shouting "Back!" to the waves - there's more chance of success than banning cryptos. 

illuminatus (not verified) Aug 30, 2017 7:32 AM Permalink

If there are any of you who would like to understand a little better what block chain and the crypto currencies and tokens really represent and are, here is a youtube video that will help.https://www.youtube.com/watch?v=RplnSVTzvnUBlock chain technology is the next huge global phenomenon as big as the industrial revolution and the internet. It is built on those two giants. It is unfolding right now and it is unstoppable by armies, unless they are willing to destroy everything that the industrial revolution and the internet have built. That is possible but not likely. Block chain and with its no-trust and decentralized technology will change the way all business is done, including banking.All you nay sayers, educate yourselves. There is no way to miss this train, because whether you choose to get on it or not, you will be on it anyway.

Oyster Aug 30, 2017 4:49 AM Permalink

Bitcoin is still in four digits. There is plenty of time for the naysayers to recognize the inevitable and move some of their fiat into crypto. Wake me up when we get to six digits.

RedDwarf Aug 30, 2017 4:46 AM Permalink

Very stupid of Russia.  They can't actually stop people from buying it, all they will do is make it be black market and be a crypto backwater instead of on the forefront like they were starting to try to do.

Sizzurp Aug 30, 2017 4:30 AM Permalink

Now the Russians are really going to want BTC. Nothing spurs demand like elites saying "you can't have that". Russia has a long experience with black markets and all this rule does is make sure the "qualfied investors" get to mark it up when they sell BTC to those who don't make the cut.

Oyster Aug 30, 2017 4:13 AM Permalink

I still don't know one other person in the flesh who owns bitcoin. Most don't even know what it is. The tulip talk cracks me up. Bubbles never happen in the dark. Where are the strippers, cashiers, gardeners and bus drivers riding the crypto train? Seems to me that it is mostly brainy geeks and survivalist types populating the cryptosphere. It's still very fringe. The only places on the planet where it has gone more mainstream is in locations experiencing political and economic tumult like Venezuela.

Mr 9x19 Aug 30, 2017 3:40 AM Permalink

keep talking, but buy a dynamo to generate power to display your amount of btc on your phone without network. this mentality is exactly the same as anyone conviced he will live for eternity. at some point, all die, nothing remain.

Oyster Aug 30, 2017 3:38 AM Permalink

I laughed out loud while reading this. The guy either doesn't understand bitcoin or he does understand it and is just fearmongering to keep mom and pop from taking their cash out of banks and putting some of it into cryptos. Blockchain tech is here. It's not going away. Adapt or get run over. Trying to wrangle crypto into the status quo corral is like trying to catch water with a tennis racquet. Good luck with that.

RabbitChow Oyster Aug 30, 2017 5:45 AM Permalink

As typical with many governments, the threat of a complete ban comes just before they open the floodgates.  In this case, the minister is probably saying this to benefit his friends with money -- the rich can have it but the little people cannot.  That argument doesn't last too long, especially when most of the little people flock to it now.The truth is, most Americans don't know or care about bitcoin or cryptos.  I say fine; it is only after something becomes 'approved' or 'accepted' or 'safe' that it really means TPTB are now in complete control of it so we'll allow you to have it.  For me it's easier to get in now rather than to wait till it's declared safe.

In reply to by Oyster

DIGrif Oyster Aug 30, 2017 5:34 AM Permalink

You know, you may be right. It could all be fear mongering...you say "adapt or get run over"..........you do realize which side here has the military and which side is a bunch of 25 - 30 year old pencil necked geek virgins right? Someone is going to get "run over", but somehow I don't think it will be the governments of the world.

In reply to by Oyster

Nostradumbass oncemore Aug 30, 2017 12:30 PM Permalink

A cautionary note about Bitcoin with all the best wishes for it's success:Stefan Molyneux Published on Nov 6, 2014SUBSCRIBE 663K Bitcoin is a revolutionary decentralized architecture which can be used for an untold number of incredibly valuable services – including the transfer of financial value. As Bitcoin adoption continues to expand, significant interests are threatened and early users could face an incredibly dangerous backlash. Please protect yourself, a fight is coming…https://youtu.be/tXBwcedQuQ0?t=769

In reply to by oncemore

LoveTruth Aug 30, 2017 3:37 AM Permalink

Cryptocurrencies- most of them backed up by pure nothings. Tulips schemes sooner or later are grounded by reality. Yes it is possible to speculate and make huge sums of money. But only very few will get away with it. 

LindseyNarrate… (not verified) Aug 30, 2017 3:16 AM Permalink

This is the final comment that I will make on this issue:  Let us, all, see what happens in the next couple/few months, and see if I am able to say, "I told you, so"... Remember, also, what I said:  When (((they))) crash it, it will be nearly instantaneous, and you WILL lose, most likely, 95+% of whatever you had in that (((scam))). I wish you good fortune, in the events to come... Lindsey

Sh3epdog Aug 30, 2017 2:56 AM Permalink

This is nonsense. Restricting digital currency trading to only "sophisticated investors" is another way of saying if you already have wealth beyond a certain level you can trade otherwise nope, your locked out of possible gains. People have different opinions on this stuff, and there are laws that restirct trading to some degree in the US too to "sophisticated investors", but to me these laws aren't really about fairness or protecting people by not letting them trade/invest at all, it's about trying to protect fat potential profits for the few at the expense of the many. Pretty much anyone past a certain age should be allowed to buy and sell goods/investment vehicles and such in the markets. If they make a bad call and lose a bit of thier funds, it's a great way to learn a bunch, I've been there and will be in such a spot again no doubt. Chinese cracking down on ICO's isn't such a great development for the Chinese people either. More top down, tight gripped central planning trying to control things. Good legal systems allow for an equal playing field, whereby everyone is equal before the law as far as thier ability buy and sell things, to exchange goods services and investment vehicles. Such legal oversight shouldn't exist to garuntee equal outcomes for market participants, only equalilty before the law when it comes to thier ability to actually be market participants. It seems like many countries are trying to subvert investing outcomes - where those who posses increasing amounts of capitol are able to "play"/invest in fields restriced to "normal" people.When it comes to investing (among other things) risk often correlates to reward (even the perception of lower risk due to an edge of information/knowledge/insight compared to other investors that percieve higher risk) It's maddening that government's often bar consumer's from investements with higher profit potential in the name of "protecting them" - I doubt that's the prime motivation

kamikun Sh3epdog Aug 30, 2017 2:57 AM Permalink

It's the financial equivalent to the "sumptuary laws" of the 1700s. How dare you fancy yourself a potential peer of your betters?Yes, the rabble need to be kept in their place. God knows what would happen if they could actually control their own financial destiny.I believe this was something Satoshi was addressing... bitcoin is a 'peer-to-peer' electronic cash system for transfering value without (and beyond) third parties. If you know how to use it - it would be prohibitively difficult to keep someone from getting, holding, or transferring bitcoin.

In reply to by Sh3epdog

harrybrown Aug 30, 2017 2:07 AM Permalink

BitCon... controlled by the NSA, what more do folks need to know. And there is no anonymity in bitcon before people say its tax free & government cant spy on what people spend & who they exchange it with etc. YES THEY CAN/DOBlockchain tech is good... but not all elements of it will be put to use for the "good of all mankind"At the end of the day for all of these crypto's to be stable & viable, they will need backing with metals / assets... so just get metals & await for the link process to be formed... Job done

Yen Cross Aug 30, 2017 1:49 AM Permalink

  Whats so very sad, it hte fact that these cybercoins are just being used as conduits to move fake monies to other domociles.  Goods and services are not valued in cyberchits. The gardener in Paraguay doesn't want to be paid in Bitchits.  Even more important, the fallout from this debacle will be used to take awy even more personal freedoms.