Breaking: Russian Authorities File Criminal Case Against BTC-e and Metabank

(Update: Volgograd authorities retract announcement of criminal filing) Last week the Central Bank of Russia (CBR) issued a consumer warning

(Update: Volgograd authorities retract announcement of criminal filing)

Last week the Central Bank of Russia (CBR) issued a consumer warning against virtual currencies as well as deemed firms engaged in being involved with them suspicious of criminal behavior.  Following last week’s announcement, Russian authorities are going after the country’s biggest player as the judicial authority of the Volgograd region has filed a criminal case against BTC-e for violating the CBR’s statement.  In addition to BTC-e, the Volgograd prefecture has also name Metabank.ru as part of its investigation.

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As per last week’s CBR decision, the central bank viewed all virtual currencies as illegal tender which could be used for criminal behavior such as funding terrorism and money laundering.  As such, according to the criminal filing, both BTC-e and Metabank weren’t accused to be money laundering or involved with other criminal activity as much as in violation of the CBR’s prohibition on Russian firms to engage in business with virtual currencies such as bitcoins.

In terms of the news, Metabank has announced on their site that they are innocent and that they suspended activity with bitcoins on January 27th when the CBR issued its warning and ruling against bitcoins and all virtual currencies.

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On BTC-e’s trader chat, the news has led to a split opinion of whether the news is real while others claim to be jumpiong ship and withdrawing their holdings.  For its part, on their official Twitter feed, BTC-e has claimed that trades are operating normally. In their chat, the company has also responded that they are in Cyprus.

In terms of whether the Volgograd judicial site is authentic, DC Magnates sources in Russia, but not from the Volgograd region, stated that the website is an official government website that appears on Russia’s overall list of government authorities.

So far, prices of bitcoins at BTC-e are steady at around $800 and have yet to be impacted much by the news (for real time prices).  The news also comes on day that until now had been positive for BTC-e with the announcement of additional currencies being launched on its MetaTrader 4 platform as well as FXOpen launching a B2B bitcoin liquidity offering using BTC-e’s order book.

Private Ownership

Following the current news, one of the biggest questions is where does private ownership of bitcoins fall?  While there is obviously now way to predict what the CBR will decide in the future, their current statement is focused on only businesses.  Company’s are prohibited from conducting business with virtual currencies due to their link to illegal behavior, but individual owners are at present only being warned about them.

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