Russia’s Interior Ministry Says Bitcoin Risky, Will Act Based on Central Bank Decisions

The Russian Ministry of Internal Affairs has reportedly said that holders of bitcoin have no recourse in the event of losses, and

The Russian Ministry of Internal Affairs has reportedly said that holders of bitcoin have no recourse in the event of losses, and that in their currently unregulated state, using bitcoins is risky.

“Unregulated status of crypto currencies makes operations with them rather risky. Bitcoin holders appear to be absolutely insecure in case of any losses,” said Alexey Moshkov, Chief of the Ministry’s Special Technical Activities Bureau.

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The statements stopped short of expressly suggesting a Bitcoin ban, as recently proposed by the Central Bank. But Moshkov did say that his Ministry defers to the Bank’s judgment on the matter and will act according to whatever regulations the Bank develops.

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The legal status of Bitcoin in Russia has changed several times during the past year. In early 2014, Bitcoin was formally declared as illegal, but several months later officials said that “such instruments should not be rejected.” The ban was re-proposed not long after, and a schedule of penalties for non-compliance was drafted.

This year, the Communications Ministry blocked several Bitcoin-related websites.

The developments come as the country’s economy falls further toward recession and its currency approaches new lows against the dollar. Any ban would be viewed by many as a protectionist measure to prevent capital flight.

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