[2014-02-06] Now official: using Bitcoins is completely illegal in Russia

[Arvicco]

http://genproc.gov.ru/smi/news/genproc/news-86432/

Googletranslated with some clean-up:

General Prosecutor's Office of the Russian Federation held a joint meeting on the legality of the anonymous payment systems and cryptocurrencies


February 6, 2014 , 16:19 Prosecutor General

Monitoring the situation of the so-called anonymous virtual currencies (cryptocurrencies) shows a growing interest using them for the purpose of money laundering of proceeds from crime.

In this regard, the General Prosecutor of the Russian Federation held a group meeting of the Interagency Working Group on combating crimes in the sphere of the economy devoted to the prevention of use of anonymous payment systems and cryptocurrencies on the territory of Russian Federation. Meeting was chaired by Chief of the supervision of the execution of federal law Anatoly Palamarchuk.

This group consisted of Deputy Chairman of the Central Bank of Russia Dmitry Skobelkin, head of Bank of Russia financial crime prevention, as well as officials of the FSB (Russian FBI) and the Russian Interior Ministry, central staff of the General Prosecutor of Russia.

In accordance with Art.27 of the Federal Law "On the Central Bank of the Russian Federation", the only allowed currency for circulation in the Russian Federation is the ruble. Introduction on the territory of Russia of other monetary units or money substitutes is illegal. Distributed anonymous payment systems and cryptocurrencies, including the most famous of them - Bitcoin are deemed money substitutes and are illegal for use by either individuals or legal entities (companies).

The distinguishing feature Bitcoin and similar virtual currencies are anonymity and lack of real value. Its price is determined solely by speculative actions that entails high financial risks, as a consequence its trading is a violation of the statutes both for citizens and organizations. The owners of cryptocurrencies in Russia are denied any means of legal protection in courts or administrative entities.

Following the meeting, outlining specific joint actions of the Bank of Russia and law enforcement to prevent criminal violations in the sphere of money circulation in Russia, a number of specific measures is approved aimed at preventing such violations of citizens and organizations associated with the use cryptocurrencies. Taking into account international experience, commission identified further areas for legal regulation and enforcement in this sector.

Development of the situation and the enforcement of the above mentioned measures will be discussed at the next group meeting.

[Arvicco]

Being extensively covered in Russian press right now:

http://bitnovosti.com/2014/02/06/genprokuratura-fsb-mery-protiv-bitcoina
http://top.rbc.ru/economics/06/02/2014/903864.shtml
http://rus.ruvr.ru/news/2014_02_06/Genprokuratura-Bitcoin-i-drugie-kriptovaljuti-ne-mogut-hodit-v-obrashhenii-v-RF-3998/
http://tjournal.ru/paper/operation-antibitcoin
http://moneynews.ru/News/18462/
http://news.mail.ru/politics/16837191/

[ArticMine]

If I understand correctly it is also illegal to conduct trade in Russia between a Russian individual and  / or legal entity and another Russian individual and  / or legal entity in USD, EUR etc., so in effect this places Bitcoin in a similar position to that of USD, EUR etc.

[Arvicco]

If I understand correctly it is also illegal to conduct trade in Russia between a Russian individual and  / or legal entity and another Russian individual and  / or legal entity in USD, EUR etc., so in effect this places Bitcoin in a similar position to that of USD, EUR etc.

Correct, it is illegal to trade, transact or deal in foreign currencies in Russia - unless one party to such deal is a properly licensed financial entity. There are multiple bank exchange offices everywhere in Russia, so exchange between foreign currency and rubles is not a problem.

Situation is completely different for cryptocurrencies. Since Bank of Russia specifically prohibited financial entities from touching cryptocurrencies, any kind of Bitcoin use is now considered illegal for anyone. There was no statement on the legality of their ownership just yet.

[thms]

Free publicity for bitcoin in Russia

also I wonder what will be the news in the near future?

"Housewife arrested for saving 5 BTC in electronic wallet?"

Woow really?

[seriouscoin]

LOL suck jokes..... idiotic Russian goverment...

So what stop Russians from using bitcoin to buy stuff online from retailers all over the world? Nothing....

[roslinpl]

Free publicity for bitcoin in Russia

also I wonder what will be the news in the near future?

"Housewife arrested for saving 5 BTC in electronic wallet?"

Woow really?

well, Russia is Russia.

But. Do you think Russians will not use bitcoin cause it is illegal?
I dont think so.
But, unfortunatly it will be not as easy as for most of us.

[Arvicco]

But. Do you think Russians will not use bitcoin cause it is illegal?
I dont think so.

Of course, existing Russian bitcoiners will continue to use it. But, it is still a tiny portion of a whole population. The effect of a legal ban is a serious barrier to a wider penetration of Bitcoin into populace. People are always wary of illegal stuff.

This ban also sets a dangerous precedent that some other countries with authocracy in power will be sure to follow. Kazakhstan was making noises about banning cryptocurrencies just recently: http://www.coindesk.com/kazakhstans-central-bank-ban-bitcoin-protect-bankers/

[roslinpl]

But. Do you think Russians will not use bitcoin cause it is illegal?
I dont think so.

Of course, existing Russian bitcoiners will continue to use it. But, it is still a tiny portion of a whole population. The effect of a legal ban is a serious barrier to a wider penetration of Bitcoin into populace. People are always wary of illegal stuff.

This ban also sets a dangerous precedent that some other countries with authocracy in power will be sure to follow. Kazakhstan was making noises about banning cryptocurrencies just recently: http://www.coindesk.com/kazakhstans-central-bank-ban-bitcoin-protect-bankers/

I guess it would be good for btc if Russia legalize it. But I guess nothing very bad happend to those who are outside Russia and price of btc will not drop.

And I guess, one day Russia gov will see profits from cryptos and will legalize it. If not now I guess in few years. For those time all russian bitcoin users must be aware and trade btc on interweb

[kjlimo]

So is this the same as when China announced a "BAN" on bitcoin???

AKA - not a ban?

[Arvicco]

So is this the same as when China announced a "BAN" on bitcoin???

No, it's very different. China blocked financials transfers to Bitcoin exchanges but otherwise considers Bitcoins legal. Russian authorities are very clear - any operations with Bitcoin in Russia are illegal. Any company accepting Bitcoin payments will be prosecuted. Exchange is illegal as well, even between individuals.

The big question is now, of course, enforcement. It will be very interesting to see how the first known case of cryptocurrency criminalization by a state actor turns out.

[giantdragon]

Russian people tend to ignore prohibitions and will use Bitcoin even more actively for savings and spending abroad!
The only bad thing is that Russian companies (especially physical who cannot operate from the offshore) aren't allowed to accept Bitcoin so this can constrain adoption.

[DuckDodgers]

Rule of law is still something of a foreign concept in Russia, so any enforcement of such prohibition would be selective at best. The Russia authorities often use routine income taxation investigations as a legal pretext to strike against "inconvenient" individuals or organizations. There could be a couple of showcase actions to scare the populace, but nothing more serious. With the rampant corruption running in all the powerful institutions and departments, the cryptocurrency could actually become a viable mean of covert payments in those cases.

[TooCasual]

Poor Russians...  Their government is saying "WE ARE STAYING IN THE DARK AGES" 

They didn't go back to communism when I wasn't looking did they?

Weird.

TC.

[roslinpl]

Poor Russians...  Their government is saying "WE ARE STAYING IN THE DARK AGES" 

They didn't go back to communism when I wasn't looking did they?

Weird.

TC.

Maybe guys from anonymous should help russia bitcoin users.

Bitcoin is good for all of us!

[Bobsurplus]

Who cares... Bitcoin will rule the world with or without stupid Russian laws banning it.

[keithers]

If I understand correctly it is also illegal to conduct trade in Russia between a Russian individual and  / or legal entity and another Russian individual and  / or legal entity in USD, EUR etc., so in effect this places Bitcoin in a similar position to that of USD, EUR etc.

Yes, based on that information provided, it is in the same boat as any other currency in comparison to the local currency of Russia.  I don't quite get how they will monitor if citizens are using it to purchase goods outside of Russia, or does it not even apply then if the transaction isn't taking place in Russia.

[HeliKopterBen]

Great!  Everything is going according to plan 

[notthematrix]

If I understand correctly it is also illegal to conduct trade in Russia between a Russian individual and  / or legal entity and another Russian individual and  / or legal entity in USD, EUR etc., so in effect this places Bitcoin in a similar position to that of USD, EUR etc.

Yes, based on that information provided, it is in the same boat as any other currency in comparison to the local currency of Russia.  I don't quite get how they will monitor if citizens are using it to purchase goods outside of Russia, or does it not even apply then if the transaction isn't taking place in Russia.

the law forbidding $ and euros is there since the USSR 1917 , nothing has changed and we al know what happend to the USSR.
and we all know that the $ was more used then the rubble so it will be with the bitcoin.

[MEpatriot]

Russia will be forced to adopt it.  The USPS situation proves the real world money masters are setting it up to be the global "reset" once the paper defaults.