Alexander Bastrykin, the head of Russian Investigative Committee, believes that cryptocurrency threatens the country’s financial stability and is used to finance extremism and media attacks against Russia.

Bastrykin made the statement in an article published by Russian biweekly “Kommersant-Vlast”. According to him, it is crucial to confront not only “the ideological element of the information war against Russia,” but also “financial backing of this activity” which is partly done using “virtual cryptocurrency”.

It is necessary to introduce criminal liability for issuance, exchange, and turnover of cryptocurrencies and other “surrogate money”, insists Bastrykin.

“According to our experience, virtual cryptocurrency, which has no centralised issuer, no transaction control centre and features anonymity of payments, is often used for terrorism financing.”

In addition to that, suggests the official, using cryptocurrencies instead of national currency units can push “legal money” out of the market and thus “threatens the country’s financial stability.”

In his student years, Bastrykin used to be a coursemate of the current Russian president Vladimir Putin. In 2013, the volunteer academic anti-plagiarism community Dissernet revealed that large parts of Bastrykin’s PhD thesis were borrowed from other authors without referring to the original source.

The Investigative Committee is famous for its tough stance towards bitcoin and other cryptocurrencies. In January, Bastrykin claimed that, according to the General Prosecutor Office, bitcoin is used to recruit new Islamic State members and purchase oil and gas from ISIL-controlled territories. In February another IC representative noted, speaking in the State Duma, that cryptocurrencies or surrogate money can seriously compete with the official currency and thus undermine the liquidity of the ruble and in prospect replace fiat money completely.

Russian Ministry of Finance supports the Committee’s initiative to criminalise the issuance and turnover of cryptocurrencies. The ministry has prepared a draft law demanding 7 years imprisonment for cryptocurrency exchange operations.

Elena Platonova