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No Crypto Ban in Russia, Just a ‘Pragmatic’ Review of Mining and Exchange Regulations Says Anton Gorelkin

Published April 30, 2024 12:27 PM
Eddie Mitchell
Published April 30, 2024 12:27 PM
Key Takeaways
  • A Russian politician has dispelled misleading headlines that Russia will ban cryptocurrencies.
  • The new amendments look to legitimize crypto mining in Russia with new reporting standards.
  • The politician says these new regulations come as a response to shifting geopolitical realities.

Lawmakers in Russia are proposing to make some amendments to the regulation of the nation’s cryptocurrency mining, and will not be imposing a sweeping ban on cryptocurrency transactions.

Following some confusing stories circulating the cryptosphere, Russian politician Anton Gorelkin has come out to dispel the misconceptions about the new laws around crypto.

What Happened?

A couple of days ago, crypto outlets began circulating a story that suggested Russia will outright ban general cryptocurrencies such as Bitcoin (BTC), except those issued within Russian jurisdiction from September 01, 2024.

According to local media  reports, the Chairman of the State Duma Committee, Anatoly Aksakov, had said:

“Digital financial assets issued in Russian jurisdiction, and digital rubles will be allowed. The need for a ban is due to the fact that today cryptocurrency – is a quasi-currency that replaces the ruble in the country. But only the Russian ruble fulfills the mission of the monetary unit, so this decision has been made.”

The same report also highlighted that the bill is also an attempt to legitimize the mining industry in Russia. Alongside mining pools and test projects, crypto miners will receive exceptions under an experimental legal framework, guided by the Russian Central Bank (RCB).

However, this isn’t the case according to Russia’s Deputy Chairman of the State Duma Committee on Information Technologies and Communications, Anton Gorelkin, who took to Telegram to clarify the matter.

Crypto Mining Laws

In a lengthy Telegram post , Gorelkin said there won’t be an outright ban on crypto, but instead measures that will set new standards for miners.

First of all, the bill seeks to create a register for miners. Gorelkin explains that only “Russian legal entities and individual entrepreneurs” will be included and have the right to mine crypto. Furthermore, energy consumption restrictions will be placed on individual miners, who can resume mining (without being included in the register) as long as they don’t exceed these limits.

This is a departure from prior proposals that sought to prohibit all non-industrial crypto-mining operations, though the specific energy consumption caps are yet to be detailed. To curb terrorist financing and other illicit uses, industrial miners would also be required to submit activity reports, to Russia’s anti-money laundering (AML) body, Rosfinmonitoring.

With increased oversight from regulators, this could be a sign that Russia is seeking to legitimize its burgeoning mining sector. He notes that cryptocurrencies obtained as a result of mining can be sold “without the use” of Russian infrastructure, which suggests that using international exchanges remains legal.

Crypto Circulation and Exchanges

With regards to the supposed crypto ban coming into effect on September 01, Gorelkin noted that the circulation of crypto will not be prohibited.

Instead, it restricts the creation of exchanges and “exchangers” outside of the RCB experimental legal zone. This is supposedly due to geopolitical realities.

Gorelkin reiterates that there will be no ban on the use of foreign cryptocurrency exchanges.

A Matter of Patriotism

Gorelkin summarized  his response by noting the obligation that politicians have to “act pragmatically” in troubled conditions, referring to the many sanctions placed on Russia as a result of the conflict in Ukraine. He writes:

“For me personally, the legalization of cryptocurrency circulation is a patriotic issue, because it helps Russia and its allies bypass unfair sanctions.”

Following his post, Gorelkin took the media to task for fumbling the details of the story, chastising them for not paying attention to the details and instead focusing on a single quote, writing:

“Surprisingly, even some respected publications have written that MPs want to ban the circulation of cryptocurrencies in Russia. Why, then, by the same bill, introduce mechanisms for detecting cryptocurrency transactions of a criminal nature, if all are considered illegal at all?”

Crypto, Slow Down

The initial response from the crypto community was about as reactionary as you could imagine it was. In classic crypto fashion, the doomsayers took to social media to remind everyone that the end is nigh.

Sure, the narrative of Bitcoin (BTC) and crypto going against financial institutions makes for juicy headlines when governments attempt to ban them. But, the crypto community needs to – or at least try to – not be so easily riled into a frenzy following some headlines and a misrepresented quote.

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