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Russian Ministry of Finance to Legalize Cryptocurrency Trading on Approved Exchanges

The Russian Ministry of Finance has drafted a bill to legalize the trading of cryptocurrencies on approved exchanges, according to a report from local media. Deputy Finance Minister Alexei Moiseev has indicated that the government is seeking to provide greater oversight. He said:

“This is about the fact that buying and selling [of cryptocurrencies] will be somehow standardized. The general idea is that it will be necessary to buy and sell on official exchanges, as it will be declared, it will be legalized.”

The news may come as a bit of a surprise, particularly given the recent rhetoric from other Russian officials in recent months. However, Moiseev has consistently maintained that Bitcoin would be legalized, though with restrictions.

The bill would allow for more open cryptocurrency trading and investment within Russia. Other countries have begun issuing statements either legalizing or banning cryptocurrencies.

The Ministry of Finance is still considering which exchanges would be approved. Moiseev indicated that the issue of exchanges is still “currently unresolved,” but the overall legalization is now “more or less clear.”

Many within the industry see the Russian addition of legalized cryptocurrencies as the first among many, as Blockchain and cryptocurrencies continue to remove boundaries between parties through trust networks. Carl Bennetts, co-founder of Status, told Cointelegraph:

“Where traditionally we have relied upon central authorities and institutions in order to conduct trade, blockchains shift this trust, and enable us to move towards a society that does away with middle-men and enables truly peer-to-peer trade, commerce and law.”

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Crimean Council of Ministers Fires Employees for Mining Bitcoin Using Government Computers

Two officials of the Crimean Council of Ministers were terminated after they were caught mining Bitcoin using government computers as of early October 2017. The officials allegedly installed “malicious software” on the government’s server, and programmed more than a dozen computers for the mining of Bitcoin.

At a press conference in Sevastopol, Alexander Akshatin, chairperson of the Anti-Corruption Committee of the Republic of Crimea, has announced that the council’s head of information technology (IT) department, and the department’s head of hardware and technical support were already dismissed.

“They put malicious software on the server of the Crimean government, which opened access to the information stored on it. Concurrently, more than a dozen computers in the basement of the building were also used which gave this same access.”

How the alleged crime was uncovered

According to Akshatin, his committee and the Russian Federal Security Service (FSB) discovered the illegal activities of the employees just in time.

He claimed that the two officials could have mined less than one Bitcoin, but were not able to cash it out. He, however, noted that the price of Bitcoin is currently pegged at $4,000, and even half a Bitcoin is already worth some money. He added that the dismissals of the officials will prevent anyone from committing the same illegal act in the future.

“They thought that there was nothing wrong with that. But if we were not on the alert, and some limited information went through this channel, you understand the extent to which this could all turn out. Fortunately, this did not happen.”

State of digital currencies in Crimea

Meanwhile, Russian Deputy Finance Minister Alexey Moiseev has announced in July that the ministry is planning to circulate virtual currencies in Crimea to boost the arrival of foreign tourists.

Fortune reports that Russian President Vladimir Putin’s Internet Ombudsman Dmitry Marinichev, has proposed the legalization of cryptocurrencies on the peninsula.

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Russia May Ban Bitcoin Payments Entirely: Deputy Finance Minister

Russia seems to be constantly shifting its stance on Bitcoin and other cryptocurrencies. Just a month ago, Buterin was smiling and signing agreements with the Russian state banks for Ethereum partnerships. 

Now suddenly, it appears that Russia may ban Bitcoin payments entirely, as was previously suggested.

Hawkish minister

The Deputy Finance Minister Alexey Moiseev told reporters that the cryptocurrency would likely be banned, especially given its volatile history, risk to consumers and potential for hacking loss. In an interview he said:

“No regulator doubts that payments will be banned. In my opinion, in a country where millions have suffered from pyramid schemes, it is impossible to allow the situation when citizens sell apartments in order to make investments in cryptocurrencies to repeat.”

Disagreements

In spite of the strong statements by the Deputy Finance Minister, other members of the Duma have taken a softer stance.

In a separate interview, Anatoly Aksakov, head of the State Duma for the Financial Market Committee, made it clear that no comprehensive plan had come to fruition. He told reporters:

“The discussions will continue. In any case, there is a market. It is developing rapidly, and there are certain advantages that could be used. I mean the advantages associated with attracting investments for projects through the ICO. I have a positive attitude to this, but there is another point of view. In order to make a decision, consensus will be necessary.”

Whether the more straightforward Moiseev or, the more political Aksakov will win out remains to be seen. Nevertheless, the battle for how to deal with cryptocurrencies in Russia will continue. Russia may become a test case for whether it is even possible for a government to ban Bitcoin at all.

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Bitcoin Price Is ‘Like MMM Ponzi Scheme’: Russian Economic Minister

The head of Russia’s Ministry of Economic Development has compared Bitcoin to the infamous Ponzi scheme MMM.

Speaking at the Federation Council, Maksim Oreshkin repeated the theme of “unqualified investors” buying into cryptocurrency being “dangerous.”

“Because if you look at the dynamics of the Bitcoin price, they’re very like the price of MMM,” he said quoted by local news outlet RIA Novosti.

MMM originated in Russia in the late 1980s as the product of serial fraudster Sergey Mavrodi. Law enforcement shut the scheme down and arrested Mavrodi in 2003, but in 2011 MMM resurfaced and is now aggressively targeting consumers in Africa.

“There are very high risks here for those who are interested [in Bitcoin],” Oreshkin continued.

“It’s clear the state cannot protect these people; their actions come entirely at their own risk. I’m simply calling for everyone to be very careful with this issue.”  

The minister’s comments continue the increasingly contradictory position Russian authorities have taken on Bitcoin.

A similar offer to restrict Bitcoin to “qualified investors” came from the country’s deputy finance minister Alexey Moiseev earlier this month, while central bank head Elvira Nabiullina said she was “categorically against” allowing it on the Moscow Stock Exchange.

At the same time, state-sponsored efforts to involve Russia in mining continue to gather speed as China’s supremacy seemingly becomes cause for envy.

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Russia Blocks Crypto Exchange Debut Ahead Of Anti ‘Gold Rush’ Regulations

Russia has promised cryptocurrency regulation laws will be ready by the end of the year as the central bank head calls it a “gold rush.”

Speaking at the Moscow Financial Forum, Elvira Nabiullina told reporters that so-called “money surrogates” would not feature on Russian exchanges.

“The use of cryptocurrencies as money surrogates is actively presenting itself for payments of goods and services,” she said quoted by TASS.

“In our view, this is tantamount to risking disruption to money circulation, and of course we are not going to allow the use of cryptocurrencies as money surrogates.”

Conflicting statements

Nabiullina’s comments run in contrast to statements last month from deputy finance minister Alexey Moiseev, who said plans were afoot to only allow “authorized investors” access to cryptocurrency, specifically through the Moscow Stock Exchange.

Russia has long used the term ‘money surrogates’ to refer to Bitcoin and other virtual currencies and continues to present conflicting approaches on how it will regulate or otherwise control their domestic use.

Following Nabiullina, finance minister Anton Siluanov told TV channel Rossiya 1 in an interview that regulation was “essential” for “deceptive investors” earning and profiting from this “highly volatile finance instrument.”

“The ministry will prepare the package of laws by the end of the year,” he confirmed.

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Russia May Ban Bitcoin Mining In Residential Homes Over Electricity Costs, Heating

Russia is considering a ban on Bitcoin mining in private homes, despite electricity companies holding talks on giving miners spare capacity.

According to Russia Today and local news outlet RIA Novosti, the governmental Informational Democracy Fund will recommend banning participation in mining pools from private addresses at an upcoming meeting of a working group on Internet growth.

“Anything [mining-related] that continues inside the country is a waste of electricity,” RIA quotes the Fund’s president Ilya Massukh as saying.

“It’s somewhat doubtful in terms of efficiency for the Russian economy.”

Russia continues to prevent mixed signals on cryptocurrency and Blockchain regulation. Last week, Cointelegraph reported that the country’s two major electricity giants were discussing options for miners to use spare capacity at 70 sites for Bitcoin mining purposes.

At the same time, an organization co-founded by Russia’s Internet ombudsman is attempting to raise $100 mln to fund a major mining project which ostensibly aims to take market share away from China, which has higher electricity costs.

Alleged hazards

Massukh meanwhile alluded to alleged safety hazards involved in private mining of Bitcoin, including regular “ventilation systems being unable to mitigate the heat generated” by the necessary equipment.

His words mimic security concerns of a different kind voiced by finance ministry deputy Alexey Moiseev, who last month recommended a complete ban on cryptocurrency sales to “ordinary people” who were not “qualified” to handle it.