New amendments to the Penal Code of the Russian Federation would ban bitcoin, according to the official Rossiyskaya Gazeta. However, the information was not confirmed by the Ministry of Finance or the Ministry of the Interior.

The use of “surrogate money” is dangerous not just to the economy of Russia; it is also a threat to the national security, according to unnamed “experts of the Ministry of the Interior and financiers,” says the press organ of the Russian government. That is why, under the new amendment to the Penal Code proposed by the Ministry of Finance, those who are guilty of cryptocurrency emission, would be punished by fines up to 0.5 million rubles ($6,334) or sent to corrective works for up to two years.

It is unclear whether the new amendment is expected to concern all bitcoin users (suggested by the title of the article) or only bitcoin miners (suggested by the article itself). However, this is just one of the many inconsistencies there generously supplied by the lawyer Ivan Solovyev, whom the newspaper consulted as an expert.

He echoes recent affirmations by Russian Prosecutor General in that the volume of “surrogate money” turnover in Russia has already reached 1% of the country's GDP and can in the future displace the ruble. The anonymity of bitcoin, according to him, makes it a vehicle of choice for arms and drugs trafficking, terrorism financing, illegal financial operations, tax avoidance, money laundering and fuelling the shadow economy. He also believes that bitcoin is controlled by a “small and well-hidden clandestine group of people.” Bitcoin’s maliciousness, according to Solovyev, is proved by the fact that Japanese prosecutors have recently accused a bitcoin exchange of stealing $2.7 million. Finally, he claims that a memo prepared after the November meeting of the Ministers of Justice of the European Union recommended a ban on cryptocurrencies in Europe.

The information has received no confirmation from the Russian Ministries of Finance or of the Interior. In the commentary to CoinFox last month the ministry affirmed that the bill banning bitcoin had a small chance to pass the State Duma, the lower chamber of the Russian Parliament.

While the bitcoin’s position in Russia is still murky, the blockchain technology attracts the attention of key players. Russian banks hope that blockchain will help them to overcome the current financial crisis. Last December the country’s largest bank Sberbank confirmed it would probably join R3 blockchain consortium.

Also some financial officials, including the Central Bank’s governor, do not share the negative sentiment towards bitcoin. On 20 January Russian media reported that Kazan-based Tatfondbank created a new lab to study blockchain and Islamic banking.


Alexey Tereshchenko