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

[cryptoaddictchie]

Russians can no longer use third-party market place to trade bitcoin and other cryptocurrencies.
Russians can not longer trade P2P also by sending it from noncustodial wallet to noncustodial wallet.

Only Russia approved exchanges and brokers can be used.

The prohibition start on July 1, 2027

This is bad for Russians and not just for them since Russia is a big country this policy might be seen by others and possibly follow what they did. From this rules its pretty clear that they wanna monitor money inflows and outflows or should I say they concern about the taxes.

 Cause doing p2p by individuals doesnt involved some taxes and their mind says:

They are not contributing to financial of our country!

[viljy]

In the future, as far as I understand, the plan is to achieve total control over all thoughts and actions of the country's citizens, not just financial transactions. For example, by 2032, all 5G smartphones are planned to incorporate state-controlled cryptography. In other words, the plan is to achieve total control over citizens at all levels: physical, software, hardware, and so on. 

Well, why such dramatics? Even the communists couldn’t control everything for 70 years. And the communists had almost no corruption. The most brutal control from above is useless if it’s not followed from below. This is one of the fundamental problems of control, which Lenin noticed long ago: if inspectors are to check something or someone. Who will check the inspectors?

Even if you wanted to conduct illegal P2P exchanges, you wouldn't be able to because the internet, internet providers, operating systems, smartphone apps, cryptography and encryption systems, and devices would all be government-controlled. These are plans for the future, but they are already being implemented. 💁

Everything is already under control - so why are tens of millions of people still on banned social media and messaging apps? They’d have to completely cut off the internet to stop this. But someone from those in charge of the bans will inevitably sell internet access...

[EarnOnVictor]

That's Putin calling the shot underground! He forcefully controls everything now; the very effect of Russia-Ukraine war.

The issue is that Russia is facing serious economic and financial problems, and their financial institutions are now overwhelmed and untrustworthy, with people losing trust in their banking system and their savings as they freeze their cash, thereby looking for various means to bypass the system.

And of course, crypto is the number 1 saviour in this matter. I guess this is causing serious capital flight out of Russia and the government might not be able to account for some funds and financial flows anymore.

But Russia will not ban the use of crypto for international trade or external payments. Crypto is still one of the country's major means of bypassing financial sanctions. Kremlin needs crypto to keep its economy afloat; that is why it didn't ban using it for foreign payments.

Putin has bit more than he could chew, and of course, he is trying to make a workaround it; he will not ban cryptocurrency because crypto has, in many ways, help Russia government and its people bypass the western sanctions. It would have been so worse for Russia and its people if not for cryptocurrency. But still, they want to limit the flow and unaccountability, and he is trying to test the waters first, more reason he gave it about 8 months grace before implementation. I believe they would have been weighing their options prior to that date.

[SeriouslyGiveaway]

Putin has bit more than he could chew, and of course, he is trying to make a workaround it; he will not ban cryptocurrency because crypto has, in many ways, help Russia government and its people bypass the western sanctions. It would have been so worse for Russia and its people if not for cryptocurrency. But still, they want to limit the flow and unaccountability, and he is trying to test the waters first, more reason he gave it about 8 months grace before implementation. I believe they would have been weighing their options prior to that date.

Putin will go away, one way or another, with his death, his step down proactively, or a de coup in Russia. He is a human that has lifespan limit so he won't be a leader of Russia for many long time. The danger from him is his illusion about power and unrealistic vision for the nation or perhaps for himself and his ambitious legacy. While I believe that Putin does not care about the future of Russian citizens, that is very dangerous for people there.

He also knows that in Russia with current bad conditions after the war against Ukraine since early 2022, if he does not ask the government to tighten the national border as well as financial flow control, most Russians will flee away from other neighborhood nations.

The 8-month grace period is quite unsure because I think enforcement will be go into effect much earlier than that. In Russia, Putin can change many things quickly but he does not make this country better, actually make it worse because of his aggressive ambitious illusion.

[stompix]

Your claim is false because I have never mentioned MiCA. The European Union has already effectively done this, but if you want to pretend that it has not that is your decision. I explicitly mention a backdoor because that is how the European Union delivers the same or worse rules than authoritarian countries, and they pretend to be nice and about freedom. Should we check the rules about cash in EU countries versus countries in the remaining world? They also confirm my claim.

Yup, let's check it!
This is basically the essence of your posts here, claims, claims, claims and nothing ever to back them up!

So where in the EU are you not allowed to withdraw your coins to your personal wallet?
Where in Europe are you not allowed to send Bitcoins to another person?
Name the countries and the laws that prohibit this.

It's always funny how some guy from the most backward country in the world tries to teach us how Europe is when he has never set foot in it!
Oh, nevermind, there is another here from an even shitier country who has stayed 60 days without Internet and is angry at the so-called EU censorship!

[m2017]

Note that @Darker45 and @pooya87 are correct imo: Self-custody isn't technically banned in that Russian regulation.

It is not prohibited, provided that these crypto assets are held on licensed platforms (there are currently 13 such licensed platforms). However, crypto assets can't be withdrawn to one’s own non-custodial wallet, which, in effect, makes self-custody impossible. It amounts to a sort of veiled prohibition.

In short, this bill turns the entire concept of cryptocurrencies upside down.

But afaik interpreting the articles correctly it would only be possible to obtain self-custodied BTC through mining / cloud mining or buying before mid-2027.

Only if the recipient’s address (wallet) is managed by an organization that is authorized to manage wallets (belonging to others).
 

I wonder if Russia has an exception for "private non commercial trades", a lot of countries do have that and you can barter or trade most goods (excluding stuff like weapons or illegal drugs) without the State's intervention. If that exists, it would open a "hole" for cash-to-BTC trades between friends or neighbors.

Legally, barter is permitted in Russia under what is known as an "exchange agreement", which is used for "goods-for-goods" swaps.Cryptocurrencies are classified as "property" (this also applies to "digital currency", which can't be used as a means of payment - isn't that absurd? ), rather than as commodities. It is highly unlikely that this loophole could be exploited. It’s an interesting situation, really: market participants wait for official regulation, only to then start hunting for (advantageous) loopholes in the law. Doesn't it strike you that this type of regulation might be improper improper regulationor at least not what was expected?

They could also try perhaps to buy non-custodial BTC when abroad.

And stay right there.


By the way, if personal possession of crypto (in their own wallets) is prohibited in this country, it will "kill" the market for hardware wallets. It’s even possible that the sale of these HW-devices could be banned (there was a period a few years back when the import of HW-devices into the country was prohibited, and it was impossible to purchase them from the official manufacturer with delivery).

Or, conversely, it might boost illegal sales (possibly involving counterfeit devices with implants). In any case, a "time of change" is a prime opportunity to make money. The question is, who will do it?

[Dogedegen]

I especially find it ridiculous or even too harsh to even ban direct transactions using addresses or wallets within a regulated exchange. It seems they have such a big issue with peer-to-peer and they're bent on dismantling it.

Regardless, however, I don't consider Russia as "one of the most hostile" to crypto. In the first place, the country has opened its doors to it. Obviously, the most hostile ones are those that outright ban crypto. Still hostile but a little less are those that accept crypto but bar banks and other financial institutions from catering crypto-related transactions.

In all fairness, Russia doesn't impose a blanket ban on crypto. Neither does it prevent banks from getting involved with it.

To ban crypto for payments isn't necessarily an atrocity considering that it's essentially how it is in many parts of the world including mine. The difference, however, is that payment in Russia is interpreted more strictly. Payment in other parts of the world is loosely interpreted in that it's literally accepted but can't be reported as such in the official books.

See you understand the nuance of the situation and put your bias aside to try to see the situation what it truly is. We can't make judgements based on biases or about single decisions, but the important thing is also to look at trends. Many countries had much better laws and freedoms regarding Bitcoin and crypto in the past and have continued to get worst, the big example of this is the European Union and that is why Bitcoin is actually quite weak there compared to the current leader like the US. Russia is the opposite case, it was always against it and banned it so this is actually a big move towards a better future. We are not going to get there with big leaps and perfect solutions, so people need to be fair when analyzing things. They might never get to where they are supposed to be, but this is a step in the right direction for them only recently they made it not completely banned.

[d5000]

Do you know that in most countries there you can't even get 100 EUR in cash from an Bitcoin ATM without KYC? This is what you mean with Europe not being close to this kind of law?

No, there is a striking difference for me. Trading P2P is a contract between individuals. Restricting such contracts is imo much worse than imposing KYC restrictions to businesses providing Bitcoin services. And the prohibition to transfer to self-custody wallets is the topping of the cake: as in my previous answer that basically bans self-custody.

The only thing missing is a law explicitly banning peer to peer transactions, but they are very close to banning them in practice unless you are referring to transactions which involve money that will never be declared.

I don't know what you're referring to here, i.e. the practice in countries like Spain that Bitcoiners have to declare most transactions for tax purposes?

Regardless, however, I don't consider Russia as "one of the most hostile" to crypto. In the first place, the country has opened its doors to it. Obviously, the most hostile ones are those that outright ban crypto.

There are only very few countries that really have banned Bitcoin, and in many cases (e.g. Bolivia) the "ban" was probably illegal itself (and has since then been lifted). Russia's restrictions are probably worse than China's now, even if there are licensed trading platforms, China doesn't prohibit P2P and self-custody.

To ban crypto for payments isn't necessarily an atrocity considering that it's essentially how it is in many parts of the world including mine. The difference, however, is that payment in Russia is interpreted more strictly. Payment in other parts of the world is loosely interpreted in that it's literally accepted but can't be reported as such in the official books.

With the term "atrocity" I refer to the ban in Turkey and (probably, if I understand correctly) Russia, where there are specific restrictions trying to specifically prevent (and punish) "circunventing" of the ban with some intermediate "bartering" step (and in the books it figures as local currency). In most other countries instead you can accept Bitcoin like when you accept some form of barter.

[PrivacyG]

the big example of this is the European Union and that is why Bitcoin is actually quite weak there compared to the current leader like the US.

We still had non Know Your Customer ATMs in the European Union many years after The United States had about none.  We had access to no Know Your Customer exchanges while The United States had it mandatory.  I remember we had a very gray regulatory frame work while American citizens were scared and frustrated at how much their government complicated the tax filing for Cryptocurrency owners.  I am not sure what the current status is with my local ATMs but I am pretty sure we still have at least one chain of those with no Know Your Customer up to a set limit.

Germany still has some advantageous laws, such as the 'zero tax' one.  Other countries have some benefits too, while The United States does not have any of them.  There are some really bad laws and regulations coming up in the European Union but I am not sure The United States is any better at all.  They lead in the Know Your Customer enforcing, in having Billionaires invest a ton of money, with the ETFs and all of that but that is pretty much it.  If I put all of that in a basket, I could easily name it the 'Evil' basket that they are leading on.

[Darker45]

~snip~

There are only very few countries that really have banned Bitcoin, and in many cases (e.g. Bolivia) the "ban" was probably illegal itself (and has since then been lifted). Russia's restrictions are probably worse than China's now, even if there are licensed trading platforms, China doesn't prohibit P2P and self-custody.

Relatively few, but definitely more than a handful.

Self-custody may be allowed in China, but that's the same with Russia sans explicit prohibition in its latest Federal Law No. 282-FZ.

As to P2P, it's also prohibited in China. Selling, buying, accepting, paying, and pretty much all kinds of trades with crypto are illegal. Good for them, though, there's the Hong Kong option. 

~snip~

With the term "atrocity" I refer to the ban in Turkey and (probably, if I understand correctly) Russia, where there are specific restrictions trying to specifically prevent (and punish) "circunventing" of the ban with some intermediate "bartering" step (and in the books it figures as local currency). In most other countries instead you can accept Bitcoin like when you accept some form of barter.

Yeah, like in a private transaction where parties agree to the exchange of different goods. As I also understand, such kind of trade is illegal in both Turkey and Russia. So, again, the interpretation is much stricter in both countries. 

However, as I've previously spoken, laws could be one thing, what's happening on the ground quite another. Right now, for example, the prohibition of moving funds from an exchange into self-custody is already in effect in Russia. We have many Russian users here who can confirm, but I doubt it's observed in reality.

In the same manner that in Turkey, Bitcoin and other cryptocurrency payments are also accepted as payments in certain shops and stores, specifically at the Grand Bazaar in Istanbul, for example. In your Places where you can travel paying with Bitcoin in 2025 thread, the city is also mentioned.

[Ronsbit]

This is not coming as a surprise to me because I know it would get to this stage were government of nations would begin placing ban on p2p and other third party exchange compelling their citizens to use their own local exchange so they can keep track of financial flows and also to generate revenue from transactions of holder's who operate on their exchange.
Russia we all know is a crypto friendly nation and I believe they too have benefited from crypto transactions because that is what the government currently uses for international trade and settlements. They have had deals with some world powers which settlement was done via Bitcoin to bypass US issues if I am not wrong. But I hope this development is for the betterment of the national economy if the President thinks in that direction and not for political reasons.

[Rabata]

Let me just brief it for you.

Russians can no longer use third-party market place to trade bitcoin and other cryptocurrencies.
Russians can not longer trade P2P also by sending it from noncustodial wallet to noncustodial wallet.

Only Russia approved exchanges and brokers can be used.

The prohibition start on July 1, 2027

https://crypto.news/russia-to-ban-peer-to-peer-crypto-trades-what-does-it-mean-for-traders/

I think Russia crypto regulations is becoming something else.

The government of a country can create any rules for its own convenience, but the entire world will not be controlled by the rules and regulations of the government of a country alone. They will never want to lose the financial freedom that people have gained by using Bitcoin. Bitcoin is now creating the most trust among people to protect their assets from transactions and inflation without the intervention of a third party. Moreover, no one can harm a person for any kind of conspiracy or political reason, which is why people give the most importance to using Bitcoin. Along with all the other advantages of Bitcoin, keeping oneself anonymous is much more important.

The rules that the Russian government is going to create are a strategy to establish complete control over its citizens. The general public will be deprived of the financial freedom that they were supposed to have. However, such an initiative by the Russian government may give them some advantage in establishing control, but they will never be able to establish complete control.

A study has shown that Russian crypto users want financial freedom. They are in favor of a decentralized system. They want to take advantage of Bitcoin or cryptocurrency. There is no guarantee that they will easily accept it if the government imposes something against their decisions or wishes.

https://www.tandfonline.com/doi/full/10.1080/17530350.2024.2413111

[Lida93]

There's a possibility that this might be the future of Cryptocurrency

We are gradually going there as it only has to take one jurisdictional government to start it and others to follow with.

They want it to be easily traced and also taxed

It's obvious the reason for the action. Government always wants to be in control at all spheres of her citizens activities. I don't know if they feel cheated on or threatened not to know about the financial activities of their citizens.

There's always a benefit they after.

Is it the benefit about users protection against bad actors.
The restrictions are too heavy for any benefit thereafter but I would honestly like to know how they can regulate private wallet P2P transfers.

Russian traders can continue buying and selling eligible cryptocurrencies through approved exchanges and brokers, subject to investor eligibility requirements and purchase limits

The Bank of Russia has clarified that individuals cannot transfer cryptocurrency from regulated digital accounts to personal self custody wallets.

[Dogedegen]

Do you know that in most countries there you can't even get 100 EUR in cash from an Bitcoin ATM without KYC? This is what you mean with Europe not being close to this kind of law?

No, there is a striking difference for me. Trading P2P is a contract between individuals. Restricting such contracts is imo much worse than imposing KYC restrictions to businesses providing Bitcoin services. And the prohibition to transfer to self-custody wallets is the topping of the cake: as in my previous answer that basically bans self-custody.

The only thing missing is a law explicitly banning peer to peer transactions, but they are very close to banning them in practice unless you are referring to transactions which involve money that will never be declared.

I don't know what you're referring to here, i.e. the practice in countries like Spain that Bitcoiners have to declare most transactions for tax purposes?

You are too much focused on the current state of things instead of looking at the big picture, the trends and the times. If you only zoom in on the most latest news without any background or trends, you will often get the wrong conclusion. If Russia had Bitcoin banned completely before, and has now changed from that to allowing regulated platforms to trade it and have it available there for customers how can that be worse than before? This clarification is just part of the regulation which means that they went from complete ban to allowed only on regulated and licensed custodial platforms. It is a big step in progress for them. Self custody was already banned, it was just not explicitly mentioned under the whole ban..

the big example of this is the European Union and that is why Bitcoin is actually quite weak there compared to the current leader like the US.

We still had non Know Your Customer ATMs in the European Union many years after The United States had about none.  We had access to no Know Your Customer exchanges while The United States had it mandatory.  I remember we had a very gray regulatory frame work while American citizens were scared and frustrated at how much their government complicated the tax filing for Cryptocurrency owners.  I am not sure what the current status is with my local ATMs but I am pretty sure we still have at least one chain of those with no Know Your Customer up to a set limit.

Germany still has some advantageous laws, such as the 'zero tax' one.  Other countries have some benefits too, while The United States does not have any of them.  There are some really bad laws and regulations coming up in the European Union but I am not sure The United States is any better at all.  They lead in the Know Your Customer enforcing, in having Billionaires invest a ton of money, with the ETFs and all of that but that is pretty much it.  If I put all of that in a basket, I could easily name it the 'Evil' basket that they are leading on.

That might be true, but the tables have turned! As the European Union has continued to become more anti Bitcoin and create pressure on it, the US has started creating regulatory frameworks and clarity around the whole situation. That is why its industry is massive over there. This does not mean that every single law is better or worse in one thing, but that one side has created a better situation because they are pursuing a favorable position. What favorable position has the EU created for Bitcoin in the last couple of years?   You can't really try to claim that the only reason that Bitcoin is so big in the US is because the US is much more advanced and richer than the EU, because that is what it would come down to me if you removed the unfavorable regulations argument?

[Rgram]

Russians can no longer use third-party market place to trade bitcoin and other cryptocurrencies.
Russians can not longer trade P2P also by sending it from noncustodial wallet to noncustodial wallet.

Only Russia approved exchanges and brokers can be used.

The prohibition start on July 1, 2027

Does that mean, they wouldn’t even have P2P services on the exchange and all trades would either be done directly with the approved exchanges or brokers?

If that be the case, it would be a stand against what Bitcoin was meant to be and a huge deviation from its purpose as contained in Bitcoin’s white paper, being a currency for p2p transactions.

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.

True, as nobody would really give a thing about it but, it would only give government legal grounds to seizures, possessions and prosecution of offenders when found, that’s just the grounds is see for this.

[Sticky Bomb]

I think Russia crypto regulations is becoming something else.

I think this is the main reason

Russia’s Finance Ministry has previously estimated that domestic cryptocurrency trading reaches roughly 50 billion rubles, or about $640 million, each day, with much of the activity occurring outside regulated financial channels. The new framework is intended to bring trading, custody and related services under licensed supervision.

Source
They've been missing their share of the pie and now they want to bring those volume to pass through regulated institutions they've providing.
Bad thing you cannot buy from the approved exchanges and transfer to your non-custodial wallet, that's where it looks very ugly and chocking, but good thing you can still hold in your non-custodial wallet and avoid sending funds to the approved exchanges.

This may give rise to physical P2P in Russia and may lead to a rise in wrench attacks since people must always want to play around regulations.

[OcTradism]

This may give rise to physical P2P in Russia and may lead to a rise in wrench attacks since people must always want to play around regulations.

Physical P2P or trade in person is very risky, with risk of physical attacks. You can be a target of physical attacks from a strange trade partner that found on a P2P market place or even with a person you knew well enough.

When things relate to money, and trades are made in person, if location of a trade is not chosen carefully, you face with many risks.

Database of Physical Attacks Against Crypto Holders.

[Findingnemo]

No country can ban p2p trading, they can ban the p2p trading platforms and break the chainbetween traders but soon they will find a way to start trading again, and assuming they can use decentralized p2p which doesn't require any KYC will be getting a boosrt if more country decides to do that.

And it will cause the price to shoot up when you are buying and selling from russia, because this will create demand in the short term or even for the longer term.