Russia to ban peer-to-peer crypto trades: What does it mean for traders?

[Arenga pinnata]

I think Russia crypto regulations is becoming something else.

What’s most evident from all this is that the Russian system seems to genuinely want to centralize everything.

After all, all trading will be channeled through the state’s official financial institutions, such as the major banks they own, which will undoubtedly serve as exchange operators and other digital custodians.

In fact, it’s reported that non-qualified retail investors are limited to a maximum purchase of 300,000 rubles per year.
(Sourch: https://cryptowave.co.id/articles/rusia-berencana-larang-total-transaksi-kripto-p2p-mulai-1-juli-2027)

But by the way, there are already at least 4 crypto exchanges there and 5 digital custodians that appear to have obtained legal status and are registered under the new digital asset framework law. And I think that number will likely grow, right?
(Sourch: https://www.kucoin.com/id/blog/hk-bank-of-russia-approves-first-5-digital-custodians-and-4-crypto-exchanges-a-turning-point-for-institutional-digital-asset-regulation)

[bitbollo]

The same has been already done in Europe and mostly of users have not noticed...
Meanwhile during the last weeks, I have seen an exchange (physical) that allow to change USDT in a local currency in a few of Asia nations - only for foreigners/tourist actually!

These regulations for a CEX would be applied also abroad / are applied also in other nations for their companies or are regulations valid only inside their border/their citizen?
USDT are evaluated at the same level of other crypto (like XMR or even BTC) or these have a different kind of regulation?

[free-bit.co.in]

The biggest question for me is still, how can they control transactions from non-custodial to non-custodial wallets or identify individuals?

Sure , they cannot directly control every transaction between non custodial wallets. But once a ban is in place, you are not free  to transact like you used to . You  might still be able to do it technically, but if you get caught, you could face legal consequences.

It's  the same with countries that ban Bitcoin.  Some people will still go ahead and invest in it anyway .  A ban doesn't mean everyone quits , it just means they're taking on way more risk.

[Somegory]

There was a similar ban in my country before, people still find a way around it, they started using other means like telegram P2P and the government just got tired of everything, they still bothering people.

I don't know how the Russia government is going to make this work but I can't compare Russia with my country in terms of technology, they are way ahead of us, maybe they will be able to control people one way or the other.

If it works many people in Russia will have to follow the rules, many people already don't see anything wrong with using centralised exchange for trading this days, maybe no room for wrench attack on Russia soil?

[viljy]

This is aimed at ensuring that absolutely all transactions are conducted through official intermediaries who charge a fee. And, of course, these intermediaries are banks. Furthermore, if a person buys cryptocurrency through such an intermediary, they cannot withdraw this cryptocurrency from the system to a non‑custodial wallet or transfer it to someone else; they can only sell it through the same intermediary (again, with a fee).

In any case, it turns out that the state officially prohibits non‑custodial storage of cryptocurrency. It is unclear how this will be controlled in practice. For example, if cryptocurrency is exchanged for cash, this is impossible. In general, this is another step towards the outflow of customers and money from the banking system back into cash. All of this will end with the growth of the shadow economy, as is always the case.

[Dr.Bitcoin_Strange]

This could reduce crypto trading in Russia because not all traders would want to trade in less convenient conditions.

It might not, I assume that even if the unapproved exchanges or trading platforms is blocked, those full time traders will still find a way to use the exchanges of their choice in carrying out the different types of trading that they do, the only challenge would be if the exchange put a restriction on people from there. In my country, there's about two exchange I can't access but if I want to use them, I use VPN  and they don't have issues with that while there is another exchange that I tried to register on and they said there's restriction in my region. So, what am just saying is that, as long as those full time day to day crypto traders can still access those unapproved exchange, they won't completely comply to this ban that their government want to put.

[Synchronice]

If you're trading P2P, isn't it already given that you want to avoid taxes? Otherwise why trading P2P? Just stick with a Binance account and use the most liquid order book, you'll trade the bitcoin at the best rates.

Making P2P illegal is as effective as making "P2P drug dealing illegal". Chances are the person who wants drugs, and wants them peer-to-peer, wouldn't have his mind changed because of a law.

Stupid laws. The point is to make degraded crowd happy. There are people who become happy when they hear that gambling is getting banned in their own country but they fail to realize that it's not gonna solve anything inside the country, actually, it will only make money go from their own country to another.

Making P2P trading illegal is probably the dumbest thing I've heard recently. It will only make things worse in terms of control because too many will move on cash.

It fights against crypto's whole principle. It was created to get rid of 3rd parties in payment and to be a P2P system.
Okay, they might make it difficult to trade crypto P2P via card but what about cash? Will they go so far that they'll hire undercover cops for making a fake trade to label person as criminal and arrest? I wouldn't be surprised because prison terms can reach seven years, which is insane.

[pooya87]

The world is moving toward more regulations and restrictions of the crypto world which always translates into more surveillance as well. We have been expecting such silly laws to be enforced for a couple of years now and there are more to come in many countries from governments that seek maximum control. Sometimes they are going to be very silly like this one trying to ban P2P trades which is impossible. Although a bigger issue with the new regulation here is the ban on self-custody! The Central Bank of Russia is actually saying that you are not allowed to transfer your own bitcoins from your centralized custodial account to a non-custodial wallet where you control the keys!

[hd49728]

The world is moving toward more regulations and restrictions of the crypto world which always translates into more surveillance as well. We have been expecting such silly laws to be enforced for a couple of years now and there are more to come in many countries from governments that seek maximum control. Sometimes they are going to be very silly like this one trying to ban P2P trades which is impossible. Although a bigger issue with the new regulation here is the ban on self-custody! The Central Bank of Russia is actually saying that you are not allowed to transfer your own bitcoins from your centralized custodial account to a non-custodial wallet where you control the keys!

Even they don't ban P2P trades, if people do P2P trades with a payment method in bank transfer, they will very possibly have problems with banks and governments. Because they completely control bank system, and your bank transfer history will be known, so if you can not declare which sources are your money from, you will have problems. In addition, they will look at your bank accounts, bank transfer history and try to tax you.

Now with the coming P2P trade ban, it will become illegal and issues will not only tax but prison and expensive fine fee if they catch Russians doing such P2P trades in the future. Similarly in other countries, P2P trades via bank system are very risky.

[BlackHatCoiner]

It fights against crypto's whole principle. It was created to get rid of 3rd parties in payment and to be a P2P system.

Extrapolate and you will see that crypto Bitcoin was created to overthrow the single biggest 3rd party, the government, entirely. 

The world is moving toward more regulations and restrictions of the crypto world which always translates into more surveillance as well. We have been expecting such silly laws to be enforced for a couple of years now and there are more to come in many countries from governments that seek maximum control.

This is exactly why the whole "Bitcoin is banned" FUD was always spread by morons. Bitcoin is a gun-powder level important invention, and governments are just as benefited from it as the people. The war was never against Bitcoin, it was against the people from enjoying the fiat gains and protecting themselves from inflation.

[Webutxo]

There was a similar ban in my country before, people still find a way around it, they started using other means like telegram P2P and the government just got tired of everything, they still bothering people.

I don't know how the Russia government is going to make this work but I can't compare Russia with my country in terms of technology, they are way ahead of us, maybe they will be able to control people one way or the other.

If it works many people in Russia will have to follow the rules, many people already don't see anything wrong with using centralised exchange for trading this days, maybe no room for wrench attack on Russia soil?

Seems you are talking about Nigeria right? Some where using traders on WhatsApp. Some people built good relationship from exchanges, when the government finally ban Bitcoin trading, they went off grid and started trading. However, the challenges that comes with it is that when something happen in the process of trading, you can't report that you have been cheated or scam. Many merchants on telegram are scammers that disguise as reputed traders.

Some traders has lost money to scammers because they took trade that was supposed to happen on exchange to outside. It may sound awkward that people get tricked by scammers to take trades outside but it's true. When somebody on the internet wins your trust for long, you don't even know when they lie or say the truth. Although, things are back to normal now as the government got tired.

[noorman0]

The biggest question for me is still, how can they control transactions from non-custodial to non-custodial wallets or identify individuals?

Technically speaking (in the context of Bitcoin), they cannot restrict transactions (short of completely shutting down the internet or the power grid), but they can exert pressure through legal threats. They might even develop their own intelligence tools. If such tools aggregate data on all deposit addresses belonging to registered exchange users, they could analyze patterns, transaction histories, and the connections between various addresses. This is one reason to use change addresses.

[Charles-Tim]

The biggest question for me is still, how can they control transactions from non-custodial to non-custodial wallets or identify individuals?

Technically speaking (in the context of Bitcoin), they cannot restrict transactions (short of completely shutting down the internet or the power grid), but they can exert pressure through legal threats. They might even develop their own intelligence tools. If such tools aggregate data on all deposit addresses belonging to registered exchange users, they could analyze patterns, transaction histories, and the connections between various addresses. This is one reason to use change addresses.

What has happened in Europe, but if you go to most decentralized exchanges, Euro is among the top 3 currencies that are traded the most with cryptocurrencies. This is what Russians will do. It took almost 2 decades before Russian government begin all these, but Russians have been trading P2P.

But what is surprising me is that I think I am seeing Russia among listed countries on most centralized exchanges.

[Dogedegen]

I think Russia crypto regulations is becoming something else.

What’s most evident from all this is that the Russian system seems to genuinely want to centralize everything.

After all, all trading will be channeled through the state’s official financial institutions, such as the major banks they own, which will undoubtedly serve as exchange operators and other digital custodians.

In fact, it’s reported that non-qualified retail investors are limited to a maximum purchase of 300,000 rubles per year.
(Sourch: https://cryptowave.co.id/articles/rusia-berencana-larang-total-transaksi-kripto-p2p-mulai-1-juli-2027)

But by the way, there are already at least 4 crypto exchanges there and 5 digital custodians that appear to have obtained legal status and are registered under the new digital asset framework law. And I think that number will likely grow, right?
(Sourch: https://www.kucoin.com/id/blog/hk-bank-of-russia-approves-first-5-digital-custodians-and-4-crypto-exchanges-a-turning-point-for-institutional-digital-asset-regulation)

We should not talk specifically about Russia in this way because it sounds like this country is the only one doing things this way. The reality is that many others like the EU and China are trying to do it this way, the EU has the most strict rules in the free world when it comes to crypto or cash. So it is not about Russia only, but more about a general trend to restrict freedoms and try to remove any privacy that humans can have. This is how they can create more control of the population.

The biggest question for me is still, how can they control transactions from non-custodial to non-custodial wallets or identify individuals?

Technically speaking (in the context of Bitcoin), they cannot restrict transactions (short of completely shutting down the internet or the power grid), but they can exert pressure through legal threats. They might even develop their own intelligence tools. If such tools aggregate data on all deposit addresses belonging to registered exchange users, they could analyze patterns, transaction histories, and the connections between various addresses. This is one reason to use change addresses.

The intelligence tools already exist and are widely used, you speak like it would be something new. Exchanges will be pressured to not serve these customers, and who breaks the rules can be fined or arrested depending on the situation. It is not hard to enforce these laws but dealing with exchanges is not peer to peer, real peer to peer transactions are very hard to track.