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Local Bitcoin ATMs in Violation of Law, Warns Russian Prosecutor

Last Updated March 4, 2021 5:01 PM
Samburaj Das
Last Updated March 4, 2021 5:01 PM

Russian prosecutors in the state of Tartarstan have issued a warning to a local businessman for installing bitcoin ATMs in two stores.

In a statement last week, the prosecutor’s office in Kazan, Tartarstan’s capital and largest city, said it “organized a check [investigation]” following media reports of two recently installed bitcoin ATM terminals in the city. On November 3, an article from local Russian publication Business Gazeta  put the spotlight on a newly installed ATM at a grocery store. It is unknown if the media report is related to the subsequent investigation.

“It has been established that [the] bitcoin machines were installed in two stores in the Novo-Savinovsky and Privolzhsky districts of Kazan,” read an excerpt from the prosecutor’s office website. The terminals were installed by a company registered in Bashkortostan, transferred to an unnamed 34-year-old, presumably the owner of the store, under a lease agreement.

Currently, bitcoin and cryptocurrencies aren’t deemed legal nor illegal by Russian law. Still, that didn’t stop the prosecutor’s office from auditing the case of two bitcoin ATMs installed in the city.

An excerpt from the announcement, which points to multiple possible violations, read:

During the audit, the prosecutor’s office announced to the businessman an official warning about the inadmissibility of violation of the law. Simultaneously, the information was sent to the Office of the Federal Tax Service for the Republic of Tatarstan to conduct a check for possible violation of cash discipline and other violations of tax legislation, as well as to the prosecutor’s office in Ufa- to assess the legality of the activities of the tenant.

The audit and investigation are currently ongoing, according to the prosecutor’s office.

The scrutiny over bitcoin ATMs comes after last month’s much-publicized remarks from Russian president Putin over concerns with cryptocurrencies. A top-brass meeting between Russian officials and Putin drew up plans to control bitcoin mining in the country followed by a Putin-led mandate to develop a framework for initial coin offerings (ICOs) and cryptocurrencies in Russia. President Putin has also called for Russia’s own national cryptocurrency, the CryptoRuble.

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