Russia’s Recent Ban On Crypto Draws Criticism From Number Of Big Names Like Telegram Founder
Reports said that Russia’s recent ban on crypto has drawn criticism from a number of big names, including Alexei Navalny’s chief of staff, Leonid Volkov, and Telegram founder Pavel Durov.
It has been reported that Russia’s central bank published a report proposing a blanket ban on domestic crypto trading and mining. The report stated that the risks of crypto are “much higher for emerging markets, including Russia.”
However, it appears that this proposed ban isn’t universally accepted in the country. A Saturday post by Telegram founder Pavel Durov stated that the proposed ban on crypto would “destroy a number of sectors of the high-tech economy.”
“Such a ban will inevitably slow down the development of blockchain technologies in general. These technologies improve the efficiency and safety of many human activities, from finance to the arts.”
The report said that while Durov conceded that the “desire to regulate the circulation of cryptocurrencies is natural on the part of any financial authority,” he concluded that “such a ban is unlikely to stop unscrupulous players, but it will put an end to legal Russian projects in this area.”
In a Telegram post on Thursday, Volkov wrote that the ban would be like “calling a spade a spade.” Navalny is an opposition leader in Russia and founder of The Anti-Corruption Foundation (FBK). In August 2020, he was poisoned with the nerve agent Novichok. After recovering in Germany, he returned to Russia in January 2021 where he was arrested and has remained imprisoned since.
Likewise, in his announcement, Volkov referenced a Thursday report by Bloomberg. It claimed that Russia’s Federal Security Service (FSB) was instrumental in advancing the ban because crypto can be used to finance “non-systemic opposition and extremist organizations.” He went on to add that he was “sure that the Bloomberg version, in this case, is 100% close to reality, but nothing will happen” because Russians are more likely to use crypto to buy drugs rather than donate it to the Moscow-based nonprofit FBK.
“Technically, banning cryptocurrency is the same as banning person-to-person transfers (i.e. it’s impossible)... Yes, they can make it very difficult to deposit funds on crypto exchanges, which means that intermediary services will simply appear that will do this through foreign jurisdictions. Yes, transaction costs will rise. Well, that’s all, I guess.”
Moreover, many of Russia’s neighbors have also taken a hard-line stance on crypto. On Wednesday, citizens in neighboring country Georgia were made to swear an oath to cease mining crypto.
The governments of Kosovo and Kazakhstan have also recently been added to the list of countries that have banned crypto mining.
Thus, perhaps one exception is the Russian neighbor Ukraine, which passed a number of laws to facilitate the country’s adoption of cryptocurrencies in September 2021.