Russian Tech and Political Executives Denounce Crypto Ban Proposal

Russia’s recent ban on cryptocurrencies has drawn criticism from many high-profile figures, including Alexei Navalny’s chief of staff Leonid Volkov and Telegram founder Pavel Durov.

On Jan. 20, the Central Bank of Russia published a report proposing a blanket ban on cryptocurrency trading and mining in the country. The risk of cryptocurrencies is "significantly higher for emerging markets, including Russia," the report said.

However, the proposed ban does not appear to be universally accepted in the country. Telegram founder Pavel Durov said in a Jan. 22 post that the proposed cryptocurrency ban would "destroy many sectors of the high-tech economy." He added:

“Such a ban would inevitably slow down the overall development of blockchain technologies that increase the efficiency and security of many human activities, from finance to art.”

While Durov acknowledged that "it is only natural that any financial authority would want to regulate the circulation of cryptocurrencies", he concluded that "such a ban is unlikely to deter unscrupulous players, but it would end the Russian Legitimate project."

Leonid Volkov: Banning Cryptocurrencies Is 'Impossible'

Meanwhile, in a Telegram post on Jan. 20, Volkov, Alexei Navalny's chief of staff, wrote that the ban was like "opening the skylight to speak out."

Navalny is a Russian opposition leader and founder of the Russian Anti-Corruption Foundation (FBK). In August 2020, he was poisoned with the Novichok nerve agent. After recovering in Germany, he returned to Russia in January 2021, where he was arrested and has been imprisoned ever since.

In his statement, Volkov referred to a Jan. 20 Bloomberg report that said Russia’s Federal Security Service (FSB) was instrumental in pushing for the ban because cryptocurrencies could be used to finance “ Unsystematic opposition and extremist groups".

He went on to add that he was "sure of what Bloomberg said, 100% close to reality in this case, but nothing will happen" because Russians are more likely to use cryptocurrencies to buy drugs than donate them to headquarters Moscow-based non-profit organization FBK.

"Technically, banning cryptocurrencies is equivalent to banning easy (impossible) money transfers between individuals... Yes, they may make it very difficult to deposit funds on crypto exchanges, which means that intermediary services will It’s going to be done through foreign jurisdictions. Yes, transaction costs are going to go up. Well, I guess that’s about it.”

Many of Russia's neighbors have also taken a tough stance on cryptocurrencies. Citizens of neighboring Georgia were asked to take an oath to stop cryptocurrency mining on Jan. 19. The governments of Kosovo and Kazakhstan were also recently added to the list of countries that ban crypto mining.

Russia’s neighbor Ukraine, with the possible exception, passed a series of laws in September 2021 to promote the adoption of cryptocurrencies in the country.

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