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Report: Russia considers making bitcoin use illegal

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Report: Russia considers making bitcoin use illegal

The Russian finance ministry is expected to present draftrules in May that prohibit the issuance and use of digital currencies such asbitcoin in Russia, Bloomberg News reported April 28.

"Bitcoin can be used to finance the shadow economy andcrimes," the Russian central bank reportedly said, adding that such riskscannot be allowed in "Russia's financial system, which we are striving tomake transparent and healthy."

Under the proposals, punishments could include fines of upto 2.5 million Russian rubles and up to seven years of imprisonment. Theproposals envisage jail sentences of four years and 500,000 rubles in fines forindividuals using cryptocurrencies, and more severe penalties for financialcompany officials.

The Russian proposals follow steps taken in Bolivia, Icelandand Vietnam to make such currencies illegal. More than 40% ofcriminal-to-criminal payments are made in bitcoin in the EU, Jan Op Gen Oorth,a spokesman for Europol, reportedly said.

A ban on bitcoin "would be impossible to enforce"as the only thing "people need to do to get around the ban is to havecomputers with an Internet connection," the newswire cited Jon Matonis, afounding director of the Bitcoin Foundation, as saying.

As of April 28, US$1was equivalent to 64.57 Russian rubles.