Russia warns against using bitcoins

[Ban Curtain]

Russian news: http://www.mn.ru/business_finance/20140127/368594774.html

Idea here is that Central Bank of Russia warns people, organizations, and banks against using bitcoins because this operations potentially dubious.

Due to anonymous nature of transactions in bitcoins it can be used for money laundering and financing of the terrorism.

So, it looks like Russia goes in Chinese way in interpretation of bitcoins

PS.
Here is original press-release of central bank of Russia: http://www.cbr.ru/press/PR.aspx?file=27012014_1825052.htm

And google-translated text:

Information

On the use in transactions "virtual currency ", in particular , Bitcoin


The Bank of Russia said that recently in the world have a certain distribution of the so -called "virtual currency " , in particular, Bitcoin . By "virtual currencies " and there is no provision for them legally obliged entities . These operations are speculative in nature, carried out on the so -called "virtual exchanges " and carry a high risk of loss of value.

The Bank of Russia warns citizens and legal entities , primarily credit institutions and non-credit financial institutions , the use of "virtual currency " for them in exchange for goods ( works, services) or cash in rubles and foreign currency.

According to article 27 of the Federal Law "On the Central Bank of the Russian Federation (Bank of Russia ) " issue in the Russian Federation monetary surrogates prohibited.

Due to the anonymous nature of the activity for the production of "virtual currency " unlimited range of actors and to use them for transactions citizens and legal persons may be , including unintentionally involved in illegal activities , including the legalization (laundering ) of proceeds from crime and terrorist financing .

The Bank of Russia has warned that Russian legal entities providing services for the exchange of "virtual currency " in rubles and foreign currency , as well as for goods (works , services ) will be considered as a potential involvement in the implementation of suspicious transactions in accordance with the legislation on counteraction to legalization (laundering ) proceeds of crime and financing of terrorism.


January 27, 2014

Using materials reference to the press service of the Bank of Russia is required .

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[BitchicksHusband]

Actually, I read elsewhere that the end basically says it's illegal to trade bitcoins for anything in Russia: currencies or products.  Is this true?  Cause if so, that's a ban.

[Ban Curtain]

Actually, I read elsewhere that the end basically says it's illegal to trade bitcoins for anything in Russia: currencies or products.  Is this true?  Cause if so, that's a ban.

No it's not ban by law. But it means that they tend to ban it. Popular bitcoin-related exchange metabank.ru has suspended its work already (until resolution of the legal aspect).

Bears on monocycles don't like innovative economics 

[zeroday]

LOL. 15 Russian banks have just collapsed with almost-complete deposit losses, their deposit insurance fund is empty, but they are warning people against the use of bitcoin.

The second most ridiculous statement about bitcoin after Cyprus central bank

[quone17]

There is a bunch of upheaval right now.  The German central bank said bail ins are going to need to be done by countries before other countries help them out.  That's the type of thing that led to the Cyprus issue and the big rise in BTC value.  But at the same time they arrested the bitinstant guy, maybe to make sure btc value doesn't go too high today!

[meanig]

LOL. 15 Russian banks have just collapsed with almost-complete deposit losses, their deposit insurance fund is empty, but they are warning people against the use of bitcoin.

The second most ridiculous statement about bitcoin after Cyprus central bank

Do you have more info on that?

[countryfree]

It's easy to explain why. Russia is afraid of BTC. Many Russians just don't trust their local currency, nor their government. This makes BTC automatically attractive, and I guess this official advice will make BTC even more attractive.

[skivrmt]

It's easy to explain why. Russia is afraid of BTC. Many Russians just don't trust their local currency, nor their government. This makes BTC automatically attractive, and I guess this official advice will make BTC even more attractive.

Russia is afraid of anything they can't control.  I think its been fairly well known that they would ban Bitcoin eventually.  If Putin can't control it, its deemed illegal.  Russia is so close back to communism these days.  Just another step in that direction.

[zeroday]

LOL. 15 Russian banks have just collapsed with almost-complete deposit losses, their deposit insurance fund is empty, but they are warning people against the use of bitcoin.

The second most ridiculous statement about bitcoin after Cyprus central bank

Do you have more info on that?

Got this news from one of my contractors who lives in russia. I asked him to send me the complete list of sources and will post it soon.

It's 3 medium banks and 12 small banks that were crashed. More banks collapses are coming soon as insurance fund was depleted to partially cover deposits from the first 3 banks.

That was published in their regional press in multiple small articles. For obvious reasons they don't publish it at once at prime time. I wonder why western media still is not aware of this issue.

I'm surprised that Russians are still keeping their money in banks. Don't they remember how it was in 1998 when almost all the russian banks crashed with complete loss of deposits?

[meanig]

LOL. 15 Russian banks have just collapsed with almost-complete deposit losses, their deposit insurance fund is empty, but they are warning people against the use of bitcoin.

The second most ridiculous statement about bitcoin after Cyprus central bank

Do you have more info on that?

Got this news from one of my contractors who lives in russia. I asked him to send me the complete list of sources and will post it soon.

It's 3 medium banks and 12 small banks that were crashed. More banks collapses are coming soon as insurance fund was depleted to partially cover deposits from the first 3 banks.

That was published in their regional press in multiple small articles. For obvious reasons they don't publish it at once at prime time. I wonder why western media still is not aware of this issue.

I'm surprised that Russians are still keeping their money in banks. Don't they remember how it was in 1998 when almost all the russian banks crashed with complete loss of deposits?

I found this article online

http://www.bdlive.co.za/world/europe/2014/01/10/russia-revokes-siberian-banks-licence

MOSCOW — Russian regulators have cancelled the licence of AKB Novokuznetsk Municipal Bank (NMB), saying that the Siberian lender made high-risk loans and allowed its owners to borrow from the company.

The Russian central bank said in a statement on its website on Thursday that NMB was running "a high-risk credit policy" and not adequately creating reserves for possible loan losses. The bank, which was among Russia’s top 300 lenders by assets as of last month, did not fulfil its obligations to creditors and depositors because of insufficient cash flow, the regulator said.

NMB said depositors with as much as 700,000 rubles ($21,000) are entitled to a full reimbursement from the Deposit Insurance Agency.

Payments would begin by January 23, the agency said on its website. NMB’s press office did not respond to calls seeking further comment.

The regulator has accelerated its crackdown since November 29 when it revoked the licence of Master Bank, Russia’s 41st largest lender by assets, for money-laundering violations. Midsize lenders Project Financing Bank and Smolensky Bank were also shuttered on December 13, and Investbank was closed after failing capital adequacy reviews.

The central bank has revoked about 30 banking licences since July 1 when Elvira Nabiullina succeeded Sergey Ignatiev as governor, compared with three in the first half of the year. She is striving to tighten regulation of banks and curtail net capital outflow, forecast at about $55bn last year.

NMB, which focused on the Kemerovo region of Siberia, was set up in 1994 and provides services to firms and individuals, according to its website.

An unidentified NMB director is being probed for allegedly transferring cash from the bank to other lenders in Russia to repay debts, according to a statement on Thursday by the Russian Investigative Committee. This had resulted in depriving the bank of sufficient reserves to cover its clients’ loans, according to the statement.

So the Russian banks are shaky, deposit compensations funds are low are they're worried about capital outflows ($55bn last year).

Of course they're going to hate Bitcoin! But the Russian people will still want it because having more than $21,000 in a Russian bank doesn't seem attractive.

If oil prices tank Russia is in big trouble!

[fsb4000]

Of course they're going to hate Bitcoin! But the Russian people will still want it because having more than $21,000 in a Russian bank doesn't seem attractive.

It is not a problem. If you have $210,000 just open 10 accounts in 10 different banks. If you have $2,100,000 just open 100 accounts in 100 different banks   

[zeroday]

Of course they're going to hate Bitcoin! But the Russian people will still want it because having more than $21,000 in a Russian bank doesn't seem attractive.

It is not a problem. If you have $210,000 just open 10 accounts in 10 different banks. If you have $2,100,000 just open 100 accounts in 100 different banks   

Opening a bank account usually takes a couple of days. Good look spending half a year just to secure your $2M

Btw, my russian colleague has just given me a website where you find all the crashed banks log

http://www.banki.ru/banks/memory/

Google translate doesnt work for me, but at least you can see dates.

[JCviggen]

Most of the closed banks in Russia did not "crash", they had their license pulled for various official reasons but word on the street is they are cracking down on money laundering. Most businesses around here avoid taxes and the banks are playing their part in that, at a fee of 6-10%.

[viboracecata]

LOL. 15 Russian banks have just collapsed with almost-complete deposit losses, their deposit insurance fund is empty, but they are warning people against the use of bitcoin.

The second most ridiculous statement about bitcoin after Cyprus central bank

Do you have more info on that?

Got this news from one of my contractors who lives in russia. I asked him to send me the complete list of sources and will post it soon.

It's 3 medium banks and 12 small banks that were crashed. More banks collapses are coming soon as insurance fund was depleted to partially cover deposits from the first 3 banks.

That was published in their regional press in multiple small articles. For obvious reasons they don't publish it at once at prime time. I wonder why western media still is not aware of this issue.

I'm surprised that Russians are still keeping their money in banks. Don't they remember how it was in 1998 when almost all the russian banks crashed with complete loss of deposits?

I found this article online

http://www.bdlive.co.za/world/europe/2014/01/10/russia-revokes-siberian-banks-licence

MOSCOW — Russian regulators have cancelled the licence of AKB Novokuznetsk Municipal Bank (NMB), saying that the Siberian lender made high-risk loans and allowed its owners to borrow from the company.

The Russian central bank said in a statement on its website on Thursday that NMB was running "a high-risk credit policy" and not adequately creating reserves for possible loan losses. The bank, which was among Russia’s top 300 lenders by assets as of last month, did not fulfil its obligations to creditors and depositors because of insufficient cash flow, the regulator said.

NMB said depositors with as much as 700,000 rubles ($21,000) are entitled to a full reimbursement from the Deposit Insurance Agency.

Payments would begin by January 23, the agency said on its website. NMB’s press office did not respond to calls seeking further comment.

The regulator has accelerated its crackdown since November 29 when it revoked the licence of Master Bank, Russia’s 41st largest lender by assets, for money-laundering violations. Midsize lenders Project Financing Bank and Smolensky Bank were also shuttered on December 13, and Investbank was closed after failing capital adequacy reviews.

The central bank has revoked about 30 banking licences since July 1 when Elvira Nabiullina succeeded Sergey Ignatiev as governor, compared with three in the first half of the year. She is striving to tighten regulation of banks and curtail net capital outflow, forecast at about $55bn last year.

NMB, which focused on the Kemerovo region of Siberia, was set up in 1994 and provides services to firms and individuals, according to its website.

An unidentified NMB director is being probed for allegedly transferring cash from the bank to other lenders in Russia to repay debts, according to a statement on Thursday by the Russian Investigative Committee. This had resulted in depriving the bank of sufficient reserves to cover its clients’ loans, according to the statement.

So the Russian banks are shaky, deposit compensations funds are low are they're worried about capital outflows ($55bn last year).

Of course they're going to hate Bitcoin! But the Russian people will still want it because having more than $21,000 in a Russian bank doesn't seem attractive.

If oil prices tank Russia is in big trouble!

It seems that Russian banks are more ridiculous that bitcoins, lol

[Ban Curtain]

LOL. 15 Russian banks have just collapsed with almost-complete deposit losses, their deposit insurance fund is empty, but they are warning people against the use of bitcoin.

The second most ridiculous statement about bitcoin after Cyprus central bank

Do you have more info on that?

Got this news from one of my contractors who lives in russia. I asked him to send me the complete list of sources and will post it soon.

It's 3 medium banks and 12 small banks that were crashed. More banks collapses are coming soon as insurance fund was depleted to partially cover deposits from the first 3 banks.

That was published in their regional press in multiple small articles. For obvious reasons they don't publish it at once at prime time. I wonder why western media still is not aware of this issue.

I'm surprised that Russians are still keeping their money in banks. Don't they remember how it was in 1998 when almost all the russian banks crashed with complete loss of deposits?

I can confirm that russia's economics in a big trouble now and in near future problems will continue to grow (thanks to russian politics, who too rude to read Ayn Rand "Atlas Shrugged").

Yesterday RUB/USD rate hit historical minimum in last 3 years (http://kurs-evro.com/kurs_rublya/), Demand in dollars from householders have grown in 3.5 times (demand in Euro growed with 50%) in last week.

In last 3 month there was closed about twenty banks (due to cancellation of licenses).

And big money outflow from country forces them to continue repressive monetary politics including creation of obstacles in bitcoins circulation and produce restrictions in any online anonymous payments (they try to make restrictions not only for bitcoins but for anything which can be used for terrorism financing ;-) ).

[artplay81]

Central Bank is pretty conservative in Russia and this statement looks quite logical to me.

Potentially, they may allow operations in bitcoins after the majority of the world accepts it (1), and (2) after internal security agencies (NSA type) are OK with it.

They will not be in avangarde of BTC movement as little countries like Singapore, Denmark.. who else is there

[meanig]

Another Russian bank bites the dust

http://www.zerohedge.com/news/2014-01-28/russian-bank-halts-all-cash-withdrawals

It would appear the fears of a global bank run are spreading. From HSBC's limiting large cash withdrawals (for your own good) to Lloyds ATMs going down, Bloomberg reports that 'My Bank' - one of Russia's top 200 lenders by assets - has introduced a complete ban on cash withdrawals until next week. While the Ruble has been losing ground rapidly recently, we suspect few have been expecting bank runs in Russia. Russia sovereign CDS had recently weakned to 4-month wides at 192bps.

 

Via Bloomberg,

    Lender has introduced complete ban on cash withdrawals until end of week, news agency reports, citing unidentified person in call center.
    Bank spokeswoman declined to comment by phone
    My Bank is top 200 lender by assets: Prime

   NOTE: Central bank has revoked about 30 banking licenses since July 1 when Elvira Nabiullina succeeded Sergei Ignatiev as governor, compared with three in the firt half of the year

Interestingly, Russia's biggest lender Sberbank has seen a 8.7% rise in deposits in December... it seems the Russian's are realizing that bank deposits are nothing more than risky loans to highly levered entities...

[Pordik]

Russia is the second best country in the world!

中國是老大!

[miketonic]

It seems that these countries who are banning bitcoin see it as a threat, otherwise they would probably just ignore it. Now why would they see it as a threat? I'd say there are many reasons, but I think it's mainly because it isn't controlled by central bank and because it threatens traditional currencies as means of exchange.

[5thStreetResearch]

Isn't BTC-e located in Russia?