Russia likely to make several cryptocurrency activities illegal

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Anyone handling cryptocurrencies inside Russia are about to be on the wrong side of the law, it looks like. The State Duma is considering making the mining of cryptos, and many other activities related to them, illegal as soon as the end of June.

Local outlet TASS reports the chairman of the State Duma Committee on the Financial Market, Anatoly Aksakov, said in an interview that new laws banning cryptocurrencies are coming soon. He said:

“I note that any operations with cryptocurrency that are contrary to the Russian legislation will be considered illegitimate. This means that mining, organizing issuance, circulation, creating exchange points for these tools will be prohibited. Administrative liability in the form of a fine will be incurred for such actions. We believe that cryptocurrencies created on open blockchains such as bitcoins, ethers, and others are illegitimate tools.”

He expects interest in cryptos to pick up quite a bit if SegWitCoin BTC is ever able to figure out how to handle faster transactions. As that isn’t the case just yet, Russia might have a bit more time before they have to be too worried about cracking down on crypto traders.

The law isn’t expected to be all encompassing though. Aksakov said in his interview with TASS that digital currencies purchased abroad would not incur fines, and that owning them was not inherently illegal.

It’s also important to note that the law Aksakov explained is focused on public and open blockchains. This means that it wouldn’t be entirely hypocritical if Russia’s central bank begins distributing a state backed cryptocurrency based on a private blockchain.

This move to introduce new legislation comes just a few short weeks after the Central Bank of Russia called on the Duma to begin regulating cryptocurrencies. In that call, they explained that better regulation would allow for more innovation, however they likely expected there to be some allowance for open blockchains when they made that appeal. With this more restrictive legislation, blockchain technology will likely progress, but cryptocurrencies are likely to see better development elsewhere.