Russian prosecutors, c-bank collaborate on closing foreign cryptocurrency websites
The Central Bank of Russia is co-operating with the Prosecutor General’s Office to close foreign websites offering crypto currency services to Russian residents.
Russia seems to have started a full-blown clampdown on cryptocurrencies, with the latest piece of evidence being the joint efforts of the Central Bank of Russia and the Prosecutor General’s Office.
Sergey Shvetsov, First Deputy Governor of the Bank of Russia, was quoted today by information agency TASS as saying that the central bank and the prosecutors are working together to close the foreign websites that offer Russian residents to buy cryptocurrencies.
Mr Shvetsov added that all derivative instruments related to cryptocurrencies are seen as negative phenomena by the “Megaregulator”. The central bank is not supporting these instruments and will implement measures to limit all operations with them for the regulated part of the Russian market. He reiterated that these instruments bring very high risks for the Russian citizens and businesses. Moreover, he noted, Bitcoin has become a means for getting artificially high returns for a very short period of time, something that is characteristic of financial pyramids.
The Bank of Russia has previously warned that crypto currencies are money surrogates and their use may be treated as violation of the AML and CFT laws. This stance was first made public early in 2014 and was reiterated in September 2017.
Earlier this month, the central bank has criticized the cryptocurrency-related activities of the MFB Clearing Center, which had presented a new set of clearing rules on its website, including ones covering clearing of off-exchange electronic contracts for cryptocurrencies. The Bank of Russia demands that MFB removes the rules associated with these contracts and presents the redacted version to the regulator.
Such contracts, according to the regulator, bear high risks. The lack of an adequate risk management system results in a threat to the interests of investors. The Central Bank stresses that cryptocurrencies are not regulated in Russia at present and that the operations involving cryptocurrencies have some of the features of illegal activities such as money laundering and terrorism financing.
The Bank of Russia also emphasized that the internal documentation of the clearing organization does not outline any measures for reducing the technological and other risks, related to virtual currencies.