Putin Urges Government, Central Bank to Reach Consensus on Crypto, Highlights Russia’s Mining Potential

Putin Urges Government, Central Bank for Common Stance on Crypto, Highlights Russia’s Mining Potential

President Vladimir Putin has joined the debate on the future of cryptocurrencies in Russia, calling on the government and central bank to work out a common position on their regulation. The Russian leader also emphasized Russia’s strengths as a crypto mining destination.

Putin Asks Ministers and Bankers to Report Back With Consensus on Cryptocurrencies

Russian President Vladimir Putin has added his comments to the ongoing discussion on how to put Russia’s growing crypto space in order. At the start of a video conference with the members of the Russian government, Putin gave his take on “an issue that is currently in the spotlight – the regulation of cryptocurrencies.”

The Central Bank of Russia has its own position, Putin said, acknowledging some of the concerns expressed by the monetary authority. The head of state noted that the bank’s experts believe the expansion of crypto-related activities carries certain risks, first of all for Russian citizens, given the high volatility and other aspects.

The president also pointed out that Bank of Russia does not stand in the way of progress and is making the necessary efforts to introduce the latest technologies in this field. His remarks come after the CBR recently launched the pilot phase of its digital ruble project.

A week ago, Russia’s central bank proposed a blanket ban on a range of operations involving other digital coins including the issuing, use, investing, trading, and mining of cryptocurrencies like bitcoin. Its hardline stance, elaborated in a consultation paper on the matter, was met with opposition from members of the government and parliament in Moscow.

This week, the Ministry of Finance joined the front against the CBR. The head of its Financial Policy Department, Ivan Chebeskov, insisted that the crypto market needs to be regulated, not banned. In his view, the main task is to provide protection for the interests of investors and citizens who use cryptocurrencies, which requires regulation, not prohibition.

According to a report by the business news portal RBC on Thursday, the finance ministry has prepared its own proposal for the regulation of cryptocurrencies without their prohibition. The department suggests all crypto-related transactions should be carried out through Russian banks. It also calls for introducing identification for Russians owning crypto wallets and dividing investors into two groups — qualified and non-qualified.

In his address to the members of the Russian cabinet, Vladimir Putin also stated:

I would ask both the Government of Russia and the Central Bank to come to some kind of unanimous opinion during the discussion, and I would ask you to hold this discussion in the near future, and then report on the results that will be achieved.

The Russian president also highlighted his country’s “competitive advantages” as far as crypto mining is concerned. Putin pointed to the surplus of electricity in energy-rich Russia as well as the availability of a qualified workforce. Russia’s significance on the bitcoin mining map has increased since China launched a crackdown on the industry last year.

Do you think Russian government institutions will agree on a common policy regarding cryptocurrency regulation? Share your thoughts on the subject in the comments section below.

Utility Seeks $800,000 From Russians Mining Crypto With Cheap Power

Utility Seeks $800,000 From Russians Mining Crypto With Cheap Power

The main utility company in Irkutsk is looking to collect almost $800,000 from owners of crypto farms that have allegedly caused a spike in electricity consumption in the Russian region. The supplier accuses the miners of burning cheap household electricity in what is, in fact, a business activity.

Power Utility Takes Crypto Miners to Court

Irkutskenergosbyt, the local power distributer in Irkutsk Oblast, has filed 137 lawsuits against customers using subsidized electricity to mint digital currencies in mining facilities set up in basements and garages. Taking the cases to court, the utility hopes to recover 63 million Russian rubles (over $790,000) in compensation, Tass reported quoting its director, Andrey Kharitonov.

The company says these home miners are engaged in entrepreneurial activities while paying for their electricity at the tariffs for the population, which are four times lower than commercial rates. The owners of the underground crypto farms are also increasing the load on the grid in residential areas leading to breakdowns and outages.

In 2021 alone, over 1,200 cases of ‘gray’ mining were identified, Kharitonov told the news agency. Of the 137 filed lawsuits, 19 claims in the amount of 21 million rubles were satisfied. All other claims are still being considered and no cases have been lost so far, he detailed.

The executive pointed out that cryptocurrency mining significantly increases the volume of consumed electrical energy in the region. While in 2020, Irkutskenergosbyt’s customers used about 7 billion kilowatt-hours (kWh), in 2021 the figure approached 8 billion kWh. At the same time, the number of private households and apartment buildings has remained almost unchanged.

The power utility has registered the highest concentration of mining farms in the Irkutsky and Shelekhovsky districts. Electricity tariffs in these rural areas are lower than those in the city of Irkutsk. At only 0.86 rubles ($0.01) per kWh, households in these parts of the region have access to the cheapest electricity in Russia while businesses have to pay 3.6 rubles per kWh.

The miners who lost in court will now have to not only cover the price difference for the power they have already consumed but also sign new contracts with Irkutskenergosbyt at commercial rates. Their region became known as the “mining capital of Russia” after a large amount of mining hardware was imported from China when Beijing launched a nationwide crackdown on the industry in May last year.

In October 2021, the governor of Irkutsk Oblast, Igor Kobzev, joined mounting calls to recognize cryptocurrency mining as a type of entrepreneurial activity and make miners pay higher electricity tariffs and taxes. In December, the federal government in Moscow allowed Russian regions to determine local electricity tariffs in residential areas.

The future of mining in Russia, among other crypto-related activities, is still undecided. A working group at the State Duma has been tasked to prepare legislation to fill the regulatory gaps remaining after the adoption of the law “On Digital Financial Assets.” Last week, the Central Bank of Russia proposed the prohibition of bitcoin mining as part of a blanket crypto ban but media reports revealed its hardline stance is not gaining support from other government institutions.

Do you expect Russia to legalize crypto mining and introduce higher electricity rates for miners? Tell us in the comments section below.

Kazakhstan Shuts Down Crypto Mining Farms Till February

Kazakhstan Shuts Down Crypto Mining Farms Till February

Data centers minting cryptocurrencies in Kazakhstan were cut off from the nation’s power grid this week and will remain unplugged for the rest of January. The measure comes as the country faces electricity shortages blamed on crypto mining and blackouts in the cold winter months.

Crypto Miners in Kazakhstan Left Without Power

Bitcoin mining facilities in Kazakhstan were disconnected from the electricity supply on Monday, Jan. 24, and will remain shut down through Jan. 31, local media revealed. The restrictions have been imposed after the state-run grid operator, KEGOC, issued a blackout warning to 196 organizations across the country on Jan. 21, Informburo.kz reported.

All 69 registered mining companies have been informed by the power utility about the cuts with letters citing “the tense situation with maintaining the balance of electricity and capacity in the unified energy system” as the main reason. A copy of the notice was posted on Telegram by the journalist Serikzhan Mauletbay and his colleagues.

Kazakhstan became a major mining hotspot following the crackdown on the industry launched by China in May 2021. The Central Asian country initially welcomed miners and took steps to regulate the sector but later blamed them for its growing power deficit which exceeded 7% in the first three quarters of last year. Electricity shortages have already forced some mining businesses to leave.

Parts of the country were hit by blackouts on Tuesday when a major power line in Southern Kazakhstan was disconnected, Bloomberg reported. The breakdown affected supplies in neighboring Uzbekistan and Kyrgyzstan as well, leaving people without electricity in all three countries.

The blackouts experienced by residents of Southern Kazakhstan on Jan. 25 are not the fault of cryptocurrency miners which operate legally, Informburo.kz noted in its report. The publication quotes Alan Dorjiyev, president of the Association of Blockchain and Data Center Industry in Kazakhstan, who noted that the issues are related to the aging infrastructure rather than the crypto miners. He commented:

How many times have we said that? In fact, the problems with electricity are not in the miners. Our entire system is on the verge.

Kazakhstan has maintained capped electricity rates and Dorjiyev pointed out that the industry has remained seriously underfunded. “And the miners became at some point an excuse for KEGOC and the Ministry of Energy,” Dorjiyev added.

Officials in Russia, which had to increase electricity exports for Kazakhstan, have cited similar reasons for the current situation, including insufficient investments in modernizing and upgrading the country’s power infrastructure and generation capacity.

Rising energy prices, mainly those of natural gas and other fuels, sparked mass protests in Kazakhstan in early January which escalated into violent clashes with police. To quell the unrest, the government restricted access to the internet and closed down local banks. The situation affected crypto mining as well, threatening the global bitcoin hashrate, the country’s share of which exceeded 18% last year.

Do you think Kazakhstan will be able to solve its problems with electricity supply in the near future? Tell us in the comments section below.

Belarus to Remain Crypto-Friendly as Ally Russia Mulls Blanket Ban

Belarus to Remain Crypto-Friendly as Ally Russia Mulls Blanket Ban

Authorities in Belarus have no intentions to adopt stricter rules for the country’s crypto space. That’s despite neighboring Russia, a close partner in many areas, considering a blanket ban on а number of activities related to cryptocurrencies as suggested by the central bank in Moscow.

Belarus to Keep Favorable Crypto Regulations

Officials in Belarus do not plan to tighten the country’s regulatory framework for the crypto sector, a statement has indicated. This comes as Russia, which is a close economic ally, is mulling over a proposal to impose harsh restrictions on a range of crypto-related operations, including mining, trading, and investing.

“Restrictive changes to the existing regulatory model are not currently foreseen,” the Belarus Hi-Tech Park (HTP) said in correspondence with BNN Bloomberg. The HTP, often called “Belarusian Silicon Valley”, manages a special legal regime established to facilitate the development of the country’s IT industry, including crypto business.

Belarus to Remain Crypto-Friendly as Ally Russia Mulls Blanket Ban

Minsk legalized crypto activities such as mining and exchange with a decree signed by President Alexander Lukashenko which went into force in March 2018. It introduced tax breaks and other incentives for companies working with digital assets.

In April 2019, the Belarusian leader suggested that bitcoin farms could be built at the nuclear power plant in Grodno and in August last year he urged Belarusians to stay in their home country and start mining cryptocurrencies. That’s despite hinting at possible tightening of regulations in March.

Using cryptocurrency for payments is prohibited in Belarus but entities registered as residents of the Hi-Tech Park can issue and trade coins and tokens. In November 2020, the country’s largest banking institution, Belarusbank, launched a service allowing users to buy and sell digital currencies.

The cryptocurrency adoption index by blockchain forensics firm Chainalysis ranks Belarus third in Eastern Europe, after Russia and Ukraine, largely due to strong peer-to-peer activity in the country. Belarusians are not obliged to report their crypto transactions to tax authorities.

Belarus maintains close economic, political, and military ties with the Russian Federation, the central bank of which proposed last week to prohibit the use, issuance, and exchange of cryptocurrencies. However, the regulator’s hardline stance has been rejected by representatives of other government institutions.

Do you believe Belarus will continue to be a crypto-friendly jurisdiction regardless of the policies adopted in Russia? Share your thoughts on the subject in the comments section below.

Crypto Ban Proposed by Bank of Russia Met With Opposition in Parliament, Government

Crypto Ban Proposed by Bank of Russia Met With Opposition in Parliament, Government

The central bank’s push for a restrictive policy regarding cryptocurrencies is not gaining support among members of the Russian government, legislature, or law enforcement. A blanket crypto ban, as proposed by the bank, would make a laughingstock of Russia, lawmakers have warned.

Bank of Russia’s Hardline Stance on Crypto Rejected by Other Russian Institutions

The Central Bank of Russia’s lobbying for prohibitive legislation on cryptocurrencies has not been met with understanding by other government bodies, Russian media revealed. Last week, the regulator published a consultation paper urging for a wide-ranging ban on crypto activities, including the use, exchange, and mining of digital coins.

However, the Russian government, parliament, and even law enforcement departments such as the Ministry of Internal Affairs (MVD) and the Federal Security Service (FSB) are not willing to back the proposals of the monetary authority, Lenta.ru reported, quoting two high-ranking members of the State Duma.

A working group at the lower house of parliament is now discussing proposals to fill the regulatory gaps remaining after the law “On Digital Financial Assets” went into force in January 2021. It comprises representatives of various government institutions and the lawmakers claim that the CBR, with its view on cryptocurrencies, is now in isolation.

Anatoly Aksakov, who heads the Financial Market Committee, and Andrey Lugovoy, deputy chairman of the Security and Anti-Corruption Committee, also accused the bank of misinterpreting the current legislation. “It is quite obvious that we are talking, among other things, about cryptocurrencies – about bitcoins, about ethereums, about litecoins, about anything,” Lugovoy emphasized.

Russia May Become Laughingstock, Deputy Warns

Andrey Lugovoy remarked that ever since the adoption of the digital assets bill, Russian lawmakers have been consistently trying to legalize the new industry, including for tax purposes. He noted that a draft law regulating crypto taxation has already been approved on first reading in the Duma but the Bank of Russia is blocking its final adoption and rejecting all amendments, despite initially supporting the proposal.

No one has put an end to cryptocurrencies yet, Anatoly Aksakov insisted. He views the central bank’s report on the matter as only a ground for further discussions. The head of the Financial Market Committee has been calling for the legalization of crypto mining, suggesting it should be registered as an industrial activity and taxed accordingly.

Lugovoy added that Bank of Russia’s position is not fully substantiated and expressed his opinion that it’s impossible to prohibit the circulation of cryptocurrencies. “Let those who want to ban explain to us how they plan to do this from a practical standpoint, so that we do not act as a laughing stock for the whole world,” he urged.

Do you think Bank of Russia will reconsider its stance on cryptocurrency regulation? Tell us in the comments section below.

No Developed Nation Bans Cryptocurrencies, Telegram Founder Pavel Durov Warns Russia

No Developed Nation Bans Cryptocurrencies, Telegram Founder Pavel Durov Warns Russia

Pavel Durov, founder of the messaging app Telegram, has criticized Bank of Russia’s proposal to impose a blanket ban on a range of crypto-related activities. Such move would stifle high-tech development and chase away blockchain specialists, Durov says.

Durov Speaks Out Against Bank of Russia Push for Crypto Ban

The cryptocurrency ban proposed by the Central Bank of Russia (CBR) will destroy a number of high-tech sectors and spark an outflow of IT specialists, Pavel Durov, the man behind the popular-in-the-crypto-community messenger, Telegram, has predicted. The Russian entrepreneur also alerted that the restrictive policy would hinder blockchain development. In a Telegram post, Durov stated:

No developed country bans cryptocurrencies. Reason: 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 arts.

Durov emphasized that solutions based on distributed ledgers, and using cryptocurrencies as units of account, are replacing what he described as “the obsolete centralized financial systems of the second half of the 20th century.”

He pointed out that Russia’s neighbors, from Ukraine to Uzbekistan, are following in the footsteps of developed nations and adopting progressive laws for the blockchain space as they don’t want to remain on the sidelines of technological and economic progress.

This past Thursday, the CBR published a consultation paper detailing its comprehensive view on the future of cryptocurrencies in Russia. The regulator proposed the prohibition of a wide range of crypto operations, including the free circulation, exchange, and mining of digital coins.

No Developed Nation Bans Cryptocurrencies, Telegram Founder Pavel Durov Warns Russia

Russia is now one of the leaders in terms of number of highly qualified specialists in the blockchain industry, Pavel Durov noted. “Thoughtful regulation will allow the country to balance the distribution of forces in the international financial system and become one of the major players in the new economy,” he elaborated.

Durov acknowledged that any financial authority would naturally want to regulate the circulation of cryptocurrencies. However, he also warned that a total ban, such as the one recommended by the Central Bank of Russia, is unlikely to stop unscrupulous players while it threatens to put an end to legitimate Russian crypto projects.

Do you agree with Pavel Durov’s statements regarding Bank of Russia’s proposal to ban crypto-related activities? Share your thoughts on the subject in the comments section below.

Decommissioned Power Plant in Armenia to Host Crypto Mining Farms

Decommissioned Power Plant in Armenia to Host Crypto Mining Farms

Armenia is going to invite cryptocurrency miners to install their coin minting hardware in an old thermal power plant. The TPP will be decommissioned and the government intends to rent it out to industrial companies including mining enterprises.

Miners Welcome to Set Up Data Centers at Old TPP in Armenia

The equipment at the Hrazdan TPP has been deemed obsolete and inefficient, producing expensive electricity, and authorities in Armenia have decided to shut down the old power plant in the near future. Its premises and infrastructure, including power lines, water and gas pipelines, will be offered to other, more profitable businesses.

The plan to rent out the old thermal station was approved at a meeting of the Commission for Regulation of Public Services on Wednesday, Sputnik Armenia reported. A company manufacturing refrigeration units has already arranged the transfer of some of its production to the TPP, the news portal revealed.

In another part of the plant, a free economic zone called Ecos has been established and is now open. Entities involved in the extraction of digital currencies will be allowed to set up their crypto farms in this area. A law legalizing crypto mining in Armenia was introduced in 2018.

Even after the Hrazdan TPP is decommissioned, the mining facilities will have access to enough electrical energy. A new thermal power plant with four power generating units, Hrazdan-5, has been built nearby by the Russian giant Gazprom. In November 2021, another TPP was completed by the Italian company Renco and Germany’s Siemens.

With the state-run Yerevan TPP, Armenia now has three modern thermal power stations. The report notes that the electricity they generate is more expensive than the energy produced by hydroelectric power plants and the Armenian nuclear power station west of the capital city.

However, the small nation in the Caucasus exports around 75% of their electricity to neighboring Iran which supplies Armenia with cheap natural gas used for power generation. This cooperation will be expanded after the construction of a new transmission line between Armenia and the Islamic Republic in 2023.

Cryptocurrency mining has been developing in Iran which recognized it as a legal industrial activity in 2019. The sector’s energy needs have also increased and both licensed and illegal miners were blamed for the country’s growing power deficit last year.

In May, then-President Hassan Rouhani announced a temporary ban on crypto mining amid rising demand and insufficient supply of electricity caused by the extraordinarily hot weather and droughts. Tehran lifted the restrictions in September when power consumption decreased with cooler weather but reintroduced them in December to avoid winter blackouts.

Do you think Armenia will take further steps to create favorable conditions for cryptocurrency miners? Share your expectations in the comments section below.

Russia May Allow Crypto Mining and Gold-Backed Stablecoins, Lawmaker Says

Russia May Allow Crypto Mining and Gold-Backed Stablecoins, Lawmaker Says

Russia can legalize cryptocurrency mining and stablecoins backed by gold under government control, a high-ranking member of the Russian parliament has suggested. The statement comes after Bank of Russia proposed a wide-ranging ban on the use of cryptocurrencies, and their trading and mining.

Mining and Some Stablecoins Can Be Legalized in Russia, Duma Deputy Insists

The free circulation of cryptocurrencies must not be allowed as they carry risks for unqualified investors, but Russia may permit the use of gold-backed stablecoins and the mining of cryptocurrencies under government control, the Chairman of the State Duma Committee on Industry and Trade, Vladimir Gutenev, told the RIA Novosti news agency.

On Thursday, The Central Bank of Russia (CBR) published a consultation paper in which it presented its comprehensive view on cryptocurrencies. The monetary authority proposed to prohibit coin operations through the Russian financial system, crypto investments, exchange, and mining in the country. Meanwhile, the bank has launched the pilot phase of its own digital ruble project.

Cryptocurrencies should be banned, Gutenev agreed, but Russia could make use of a stablecoin denominated in gold and under state control. Such a financial product would be an interesting proposition for both private investors and companies. It can also be used for saving, the deputy said, quoted by the Prime business news portal.

The gold-backed stablecoin could be similar to a golden ruble, the parliamentarian elaborated, and Russia can employ it to circumvent sanctions and the policy of containment applied against the country. The coin can also be used to facilitate regular and transparent economic relations with other nations.

Gutenev revealed he had already discussed the idea with CBR governor Elvira Nabiullina. The head of the Industry and Trade Committee thinks that as an asset, gold is quite undervalued in comparison with reserve fiat currencies such as the U.S. dollar and the euro.

In October, the Ministry of Foreign Affairs said that Russia may consider partially replacing the greenback in currency reserves and trade settlements with other currencies, and even digital assets in the future. Amid expanding U.S. sanctions, Moscow is putting an emphasis on “dedollarization,” Deputy Foreign Minister Alexander Pankin stated in an interview with Interfax.

Commenting on Bank of Russia’s call for a ban on crypto mining, Vladimir Gutenev said he thinks that cryptocurrency farms can be allowed to operate legally if their activities are under strict control of the state. Miners can take advantage of the abundant energy resources and favorable climate conditions in some Russian regions, provided their facilities are powered transparently and they pay all due taxes.

A working group at the State Duma, the lower house of parliament, is now preparing proposals to fill the regulatory gaps in the Russian crypto space remaining after the adoption of the law “On Digital Financial Assets.” Its members are expected to address the outstanding issues in several areas, including the legal status of cryptocurrencies, coin trading, and mining. Media reports have revealed that not all government institutions share Bank of Russia’s hardline position on the matter.

Do you think Russia will permit the use of stablecoins and authorize cryptocurrency mining? Share your expectations in the comments section below.

Russian Banks Begin Testing Digital Ruble Payments

Russian Banks Begin Testing Digital Ruble Payments

Banks in Russia are preparing to dive into the pilot phase of the digital ruble project and some are already testing transactions with the currency. Trials have started with customer-to-customer (C2C) payments and Bank of Russia plans to expand the types of operations in the future.

Digital Ruble Pilot Launches With 12 Participating Banks

The Central Bank of Russia (CBR) completed the prototype of the digital ruble platform in December and is now beginning to experiment with transactions. A dozen banks have been invited to join the first stage of the project’s pilot phase. The monetary authority plans to gradually expand the range of participants to include other financial service providers and types of transactions.

Right now, the majority of Russian banks are gearing up to start testing the new central bank digital currency (CBDC), Tass reported after contacting the institutions. One of them, Promsvyazbank (PSB), is currently processing C2C payments, Maxim Khrustalev, advisor to the deputy chairman of the bank told the news agency.

Russian Banks Begin Testing Digital Ruble Payments

After the customer-to-customer transactions, “the technical testing of C2B, B2C and B2B payments will begin. Based on the results of the piloting, Bank of Russia will start to introduce the digital ruble platform into commercial operation,” Khrustalev added.

Tinkoff Bank is also joining the efforts to trial the new, digital form of Russian fiat. “Tinkoff is preparing to pilot the digital ruble in the near future,” according to a statement from the online neobank. Tinkoff recently entered the crypto space by acquiring a controlling stake in the Swiss-registered fintech startup Aximetria.

Another major Russian bank, VTB, said its infrastructure is ready to pilot the digital ruble. “Piloting includes integration with the digital ruble platform and the introduction of services such as opening a wallet through a mobile application and digital ruble transfers between individuals,” the bank’s press office detailed.

According to Vitaly Kopysov, chief innovation officer at SKB-Bank, the digital ruble will become a driver for the development of new national payment services for both citizens and companies. Speaking with Tass, he elaborated:

The digital ruble will give an additional impetus to the creation of offline cashless payment services for businesses in the absence of Internet access at a point of sale, which is very important given the geography of the Russian Federation.

Russia’s central bank has maintained a hardline stance on cryptocurrencies and recently proposed a wide-ranging ban on crypto-related activities. It began contemplating a digital ruble three years ago and decided to explore options to issue the CBDC in 2020, when it published a consultation paper on the matter. In April 2021, the bank released a digital ruble concept outlining its principal architecture.

Other banks taking part in the first stage of the pilot are Ak Bars, Alfa-Bank, Dom.rf Bank, Gazprombank, Rosbank, Sberbank, Bank Soyuz, and Transcapitalbank. The Federal Treasury, along with financial intermediaries, will join at the second stage when transactions between private individuals and corporate entities will be carried out, including consumer-to-business (С2B), business-to-business (B2B) and business-to-government (B2G) transactions.

Do you think Russia will be able to successfully launch a digital ruble? Share your expectations in the comments section below.

Iran to Pilot ‘National Cryptocurrency,’ Considers Blockchain Tech for Stock Market

Iran to Pilot ‘National Cryptocurrency,’ Considers Blockchain Tech for Stock Market

The Central Bank of Iran soon plans to launch the pilot phase of its digital currency project, an official unveiled. The Islamic Republic hopes to a join a growing club of nations that want to take advantage of having a sovereign coin, while it also seeks to implement blockchain technology in other areas.

Iran to Begin State-Backed Digital Currency Trials

The monetary authority of Iran intends to pilot its central bank digital currency (CBDC) in the near future, a high-ranking representative of the financial regulator said, quoted by the Iranian Labour News Agency (ILNA). The news comes in the fourth year since the initial announcement of the project.

According to a statement by Mehran Moharamian, deputy governor for IT at the Central Bank of Iran, the CBI sees digital currencies as a solution for resolving certain inconsistencies and decentralizing resources. Other countries have already begun to benefit from CBDCs, he noted.

Moharamian did not provide specific details about the start of the pilot phase. Authorities in Tehran tasked the country’s Informatics Services Corporation with developing a “national cryptocurrency” in 2018. The CBI arm is operating the country’s banking automation and payment services network.

Later, the company explained that the Iranian digital currency has been designed using the Hyperledger Fabric platform, a blockchain framework implementation and one of Hyperledger’s projects hosted by the Linux Foundation.

Blockchain Expected to Revive Iranian Stock Market

Although the Iranian crypto space remains largely unregulated — aside from mining — another report this week indicated that officials have been looking for various ways to employ the technology that underpins cryptocurrencies like bitcoin.

Iran’s capital market should genuinely consider using blockchain technology as it can help address some major needs of the share market and create new opportunities for its revival, Majid Eshqi, head of the Iranian Securities and Exchange Organization recently commented. Quoted by SENA and the English-language business daily Financial Tribune, he elaborated:

At the latest, in two years we will be compelled to make use of blockchain technology… It will not be long before we start tokenizing physical assets and stocks that can be easily traded on the new platforms.

He added that the time has come to consider the potential of blockchain technologies to solve some existing issues, such as identity verification of shareholders, for example, and start the infrastructure process.

Earlier in January, Iranian media revealed that Tehran is going to allow local companies to use cryptocurrencies in international settlements with their partners abroad. The Central bank and the government of the sanctioned country have reportedly given the green light to the adoption of a mechanism facilitating payments with digital coins in the field of foreign trade.

Do you think Iran will continue to explore ways to implement cryptocurrency and blockchain technology? Tell us in the comments section below.

Bank of Russia to Monitor Banks’ Dealings With Crypto Exchangers

Bank of Russia to Monitor Banks’ Dealings With Crypto Exchangers

The Central Bank of Russia has started to examine the operations of Russian banks with cryptocurrency exchangers, according to local media. Transactions between individuals through these platforms are of particular interest as the regulator believes these carry risks of financial losses and fraud.

Central Bank Asks Russian Banks for Details on Crypto-Related Transactions

In late December, the Central Bank of Russia (CBR) sent commercial banks a new reporting form for transactions, seeking information about money transfers related to crypto exchange websites. These are mostly payments between private individuals, including transactions with cards and wallets registered in the name of dummy persons.

The regulator is asking the banking institutions to provide details about their interactions with crypto exchangers such as btc-obmennik.com, cleanbtc.ru, 100bitcoins.com, ultrachange.biz, 1wn.kz, cryptex24.com, openchange.cash, xchange.cash, vexel.com, and betatransfer.org, a new report by the Kommersant reveals.

The leading business daily quotes sources from the crypto industry claiming that over 400 crypto exchangers now offer services to Russian residents on the internet. Their estimates suggest that the monthly volume of the over-the-counter crypto market in Russia and neighboring countries is around $1.3 billion. The Russian Federation accounts for about half of the total.

The crypto exchangers often list on their websites the names and logos of established financial institutions and payment providers such as Sberbank, VTB, Tinkoff Bank, Western Union, Webmoney, and Koronapay as their partners. Two of them, Webmoney and Koronapay, have already denied any cooperation with the coin trading platforms.

Crypto Exchangers Operate Without Registration, CBR Says

Bank of Russia points out that the exchangers provide services for the purchase and sale of cryptocurrencies without registering their activities or bearing any financial obligations to their customers. At the same time, the transactions are being conducted anonymously, without studying their purpose and the sources of the funds to assess risks such as money laundering, for example.

The monetary authority, known for its hardline stance on cryptocurrencies, also noted that the trading sites often accept payments not to their actual accounts but to bank cards and digital wallets issued to private individuals. This “creates the risk of citizens losing money and getting involved in fraudulent schemes,” the regulator warned.

In a recent interview with the government-issued newspaper Rossiyskaya Gazeta, the head of the Investigative Committee of the Russian Federation Alexander Bastrykin remarked that the status of online platforms providing options to buy and sell crypto anonymously is yet to be determined. He also called for introducing mandatory identification for all cryptocurrency users in Russia.

Authorities have been going after crypto exchangers for the past few years. Part of the problem is that a range of crypto-related activities, including trading, remain unregulated even after the adoption of the law “On Digital Financial Assets.” A working group at the parliament is now preparing proposals to fill the gap. Discussions on the future of crypto exchangers should end in 2022, Deputy Director of the Rosfinmonitoring watchdog Herman Neglyad was quoted as saying last month.

Do you expect Russia to regulate or crack down on online crypto exchangers? Share your thoughts on the subject in the comments section below.

Bank of Russia Proposes Wide Ban on Cryptocurrency Use, Trade, Mining

Bank of Russia Proposes Wide Ban on Cryptocurrency Use, Trade, Mining

True to its hardline stance on decentralized digital money, the Central Bank of Russia is now pushing for a wide-ranging ban on crypto-related activities such as issuance, exchange, and mining. A consultation paper published by the regulator cites threats to financial stability and citizens’ wellbeing among the main reasons for the proposed restrictions.

Russia’s Central Bank Seeks Public Opinion on Restrictive Crypto Policy

The monetary authority of Russia is advocating a ban on an array of crypto activities in a report titled “Cryptocurrencies: Trends, Risks, Measures.” The document was published Thursday and the regulator awaits comments and suggestions on its contents until March 1. In the paper, the Central Bank of Russia (CBR) acknowledges the rapid growth of the global crypto market in the past year as well as the annual $5 billion in crypto transactions made by Russians.

At the same time, the bank points out that the growth in value is determined mainly by speculative demand which is forming a bubble, and that cryptocurrencies have the characteristics of a financial pyramid. Their spread, it says, poses threats to the stability of Russia’s financial system, monetary policy sovereignty, and the wellbeing of its citizens.

Bank of Russia Proposes Wide Ban on Cryptocurrency Use, Trade, Mining

To reduce these threats and risk of illegal activity, Bank of Russia intends to collaborate with the Russian government and parliament in the coming months on a number of proposed legal amendments. These include the introduction of legal liability for violations of the ban on the use of crypto as a means of payment for goods and services.

The authority has often referred to cryptocurrencies like bitcoin and stablecoins as “monetary surrogates” that are prohibited under current Russian law. It now wants to ban their issuance and circulation in the Russian economy, including through digital asset exchanges and peer-to-peer platforms.

The central bank has also opposed crypto investments and intends to prohibit financial organizations from investing in cryptocurrencies and crypto-based financial instruments. It insists that the Russian financial infrastructure and intermediaries should not be used to facilitate cryptocurrency operations.

Mining cannot be ignored either, Bank of Russia says, as it increases the involvement of the population and the economy in the crypto market. The regulator believes the current scale and further spread of the activity bring significant risks for the environment and energy supply. Prohibition is the best solution, the CBR says.

Amid China’s crackdown on the industry, energy-rich Russia has become a mining hotspot. The minting of digital currencies is not only a profitable business but also an additional income source for many households that have access to subsidized electricity. Authorities in some regions have complained about rising energy consumption that strains power grids.

Bank of Russia plans to improve its monitoring of crypto operations. It intends to work closer with financial regulators in other jurisdictions as part of these efforts, especially in order to gather information about transactions conducted by Russian citizens. The bank’s proposal, however, does not envisage restrictions on owning cryptocurrency outside of Russia, as noted by the head of the central bank’s Financial Stability Department, Elizaveta Danilova.

In advance of presenting its view on crypto regulations in this report, the Central Bank of Russia stated last month that it sees no place for cryptocurrencies in the country’s financial market. Media reports have indicated that other Russian government institutions do not share its conservative position. A working group set up by the State Duma, the lower house of Russian parliament, is now preparing proposals to comprehensively regulate the Russian crypto space.

Do you expect the Russian government to support Bank of Russia’s proposal to restrict crypto activities? Tell us in the comments section below.

Regulator Reiterates Call for EU Ban on Proof-of-Work Mining

Regulator Reiterates Call for EU Ban on Proof-of-Work Mining

The EU should prohibit proof-of-work crypto mining, an executive at the European securities watchdog has insisted. Coins relying on the energy-intensive method of minting pose a risk to efforts aimed at meeting climate change goals such as those set in the Paris Agreement, the regulator says.

Bitcoin Mining Now Attacked in EU for Burning Too Much Renewable Energy

A high-ranking financial regulator has reiterated a call for an EU-wide ban on cryptocurrency mining based on the proof-of-work concept. The power-hungry model employed in the minting of major cryptocurrencies like bitcoin — as well as ethereum at this point — has been blamed for using increasing amounts of renewable energy, allegedly slowing down climate transition in other sectors.

Speaking to the Financial Times, the Vice-Chair of the European Securities and Markets Authority Erik Thedéen stated that regulators on the Old Continent should consider banning proof-of-work mining and try to steer the industry towards the less energy-intensive proof-of-stake method. This, according to the ESMA official, will lower its huge power consumption.

Thedéen, who also serves as director-general of Sweden’s Financial Services Authority, noted that bitcoin mining has become a “national issue” for his own country. In November, he and Björn Risinger, head of the Swedish Environmental Protection Agency, singled out proof-of-work mining as the main reason for bitcoin’s high energy usage and issued the initial call for a ban in the EU.

“The solution is to ban proof of work,” Thedéen has now insisted again, emphasizing that proof-of-stake has a significantly lower energy profile. “We need to have a discussion about shifting the industry to a more efficient technology,” the regulator elaborated. Thedéen was clear, however, that he was not advocating a wide crypto prohibition.

Cryptocurrency mining has been criticized for its growing impact on the environment. Last May, China — which at the time had the largest share of the global hashrate — launched a crackdown on the industry following President Xi Jinping’s pledge to achieve carbon neutrality. Miners have been working to increase the proportion of renewable energy in the mix that powers their hardware. However, Erik Thedéen says:

It would be an irony if the wind power generated on Sweden’s long coastline would be devoted to bitcoin mining.

Mining companies have been relocating to countries with developed wind and solar power generating capacities such as Sweden and Norway, which mulls backing the Swedish proposal. Thedéen now warns that if authorities fail to intervene, a significant amount of renewable energy would go towards minting digital currencies instead of helping traditional services move away from coal-powered energy sources.

Do you think the EU will respond to Sweden’s call and ban proof-of-work crypto mining? Share your expectations in the comments section below.

Main Opposition Candidate for President of South Korea Pledges Support for Crypto Tax Exemptions

Main Opposition Candidate for President of South Korea Pledges Support for Crypto Tax Exemptions

The leading presidential candidate of the opposition in South Korea has promised voters to ease the tax burden on crypto-related profits through exemptions. In a recent statement, Yoon Suk-yeol indicated that crypto investors will be treated like those who put money into stocks.

Presidential Candidate Looks to Attract Young Voters With Crypto Tax Cuts

Yoon Suk-yeol, the nominee of South Korea’s conservative People Power Party for the upcoming presidential elections in March, has announced his intention to back the raising of the threshold for the tax on gains from crypto investments, from the current 2.5 million won (around $2,100) to 50 million won (a little over $42,000), Korean media reported.

The opposition candidate made the pledge at the party headquarters on Wednesday, noting that his administration would increase the bottom limit to the level that applies to stock investments now. Thus, Koreans who purchase cryptocurrency can expect more substantial tax exemptions if he is elected.

Yoon unveiled that he will also put forward a digital asset law tailored to increase investor protection, the Yonhap news agency added. At the same time, under the new legislation, the government in Seoul will be able to seize profits obtained through market manipulation.

Part of his plans for Korea’s growing crypto space is also the establishment of a new government agency to take on the oversight over new areas of the digital industry such as cryptocurrency and non-fungible tokens (NFTs). The presidential hopeful also wants to allow domestic initial coin offerings (ICOs). He emphasized:

I will foster a digital asset investment environment similar to the stock market to ensure young people can enter new markets without fear.

Luring young voters interested in cryptocurrencies has become a priority for the ruling political force as well. The Democratic Party of Korea announced recently it’s going to raise election funds through cryptocurrency donations and issue receipts to donors in the form of non-fungible tokens. The digital money will be used to finance the election campaign of the party’s presidential nominee, Lee Jae-myung.

In December, the South Korean parliament postponed the 20% tax on annual profits from virtual assets, which was supposed to be introduced in January, for one year until Jan. 1, 2023. Lawmakers approved the move after members of the opposition and representatives of the country’s crypto industry criticized the different structuring of the crypto tax in comparison with the levy on gains from equity investments.

Do you expect Yoon Suk-yeol to fulfil his promises to crypto investors after the presidential election in March? Tell us in the comments section below.

Crypto Miner Convicted in Russia for Allegedly Stealing Power to Mint Digital Coins

Crypto Miner Convicted in Russia for Allegedly Stealing Power to Mint Digital Coins

A regional court has sentenced a man accused of illegally connecting his crypto farm to the grid to two years in prison. The decision comes as authorities in Moscow prepare to address the lack of proper regulations for cryptocurrency mining, which has become a popular source of income in Russia.

Illegal Crypto Farm Burns 1.3 Million kWh in Komi, Russia

The city court in Syktyvkar, capital of the Russian Komi Republic, has found a 39-year-old local resident who was operating an underground crypto farm guilty of electricity theft. The hardware was installed in a building rented from an industrial enterprise and illegally connected to the nearby transformer station.

The man ran the mining facility for at least five years, using 1.3 million kilowatt-hours of unpaid electricity to mint digital currencies, the region’s Prosecutor’s Office said in a press release published on Tuesday. The stolen electricity is worth an estimated 5.7 million Russian rubles (close to $75,000 at the time of writing).

According to the announcement, the man whose identity was not immediately revealed has received a two-year suspended sentence with a probation period of two years for his mining activities between 2015 and 2020 to which he admitted in court.

In the absence of government-adopted rules, crypto mining has been spreading across energy-rich Russia, not only as a profitable business but also as an additional income source for many ordinary people. In some regions, local authorities have complained that the rise of mining in basements and garages has caused damage to the electrical network which is struggling to meet the growing loads.

In Irkutsk Oblast, which maintains some of the lowest electricity rates in Russia, at $0.01 per kWh for households, a power utility has filed 85 lawsuits this year against home miners. A recent report revealed the company had already won nine cases from which it expects to receive 18.7 million rubles ($250,000) in compensation.

Calls have been mounting among officials in Moscow and certain regions to recognize crypto mining as an economic activity and tax it. This would also give authorities an opportunity to charge miners more for the energy they consume. A working group at the State Duma is now preparing regulations for a number of crypto-related activities including mining.

In December, the federal government allowed Russian regions to determine local electricity tariffs in residential areas. The move is expected to affect amateur miners who will pay more after a certain consumption threshold is reached. Home mining has become so popular largely due to the cheaper electricity offered to the population.

Do you think Russia will soon regulate cryptocurrency mining? Share your expectations in the comments section below.

Financial Market Committee Chair Aksakov Joins Calls for Identification of Russian Crypto Owners

Financial Market Committee Chair Aksakov Joins Calls for Identification of Russian Crypto Owners

Anatoly Aksakov, head of the Financial Market Committee at the Russian parliament, has reiterated a warning for cryptocurrency investors and insisted that Russians owning coins should declare their digital assets. The parliamentarian also urged for the comprehensive regulation of crypto mining and taxation.

Aksakov Warns Russian Crypto Investors They Can Lose Everything

Russians have put 5 trillion rubles (around $67 billion) into crypto and some of them may lose everything as cryptocurrencies are not backed by anything, Anatoly Aksakov, a deputy with a key role in the regulation of Russia’s crypto space, has recently stated. Many of these people are non-qualified investors and as such, pyramid schemes are likely to occur, added Aksakov who heads the Financial Market Committee at the State Duma, the lower house of parliament.

Repeating previously issued warnings in an interview with the parliamentary Duma TV channel, the Russian lawmaker emphasized that there is no stability in the digital currency market. Crypto prices can quickly move by 20 – 30% in one direction or another, Aksakov noted and elaborated:

Therefore, it is important to regulate the market, to protect, first of all, our citizens, to establish taxation and certain rights for cryptocurrency owners. However, they must be identified.

The statement comes after a similar call was recently issued by the head of the Investigative Committee of the Russian Federation, Alexander Bastrykin. Last week, Bastrykin, who answers directly to President Putin, said cryptocurrency should not remain anonymous, adding that mandatory identification of all crypto users should be introduced in Russia.

Anatoly Aksakov is convinced that crypto holdings must be reported to the state in order to prevent their use to finance terrorism, drug trafficking, and the acquisition of weapons in the first place. Among other reasons, he mentioned taxation — Russians are obliged to pay taxes on their crypto profits even under the current legislation but a dedicated law on crypto taxation is yet to be adopted by the Duma.

The high-ranking member of the house also talked about the need to regulate cryptocurrency mining, which has been spreading in Russia both as a profitable business and as an alternative source of income for private citizens.

Aksakov remarked that if Russian authorities decide to legalize mining, it should be registered as an economic activity and taxed. He further insisted that differentiated tariffs for the energy consumed by mining companies should be introduced in accordance with the cross-subsidization scheme applied in Russia. This would lead to higher electricity rates for miners.

Last month, the leader of Aksakov’s ‘A Just Russia — For Truth’ social-democratic party, Sergei Mironov, urged Bank of Russia to legalize the cryptocurrency market and accelerate the introduction of the digital ruble. In his view, the regulator’s tough stance on the matter hinders the development of crypto technology and makes it dependent on Western payment systems.

Various aspects related to cryptocurrencies, including mining, trading and taxation, remain unregulated in Russia even after the law “On Digital Financial Assets” went into force in January 2021. A working group set up at the Duma is now preparing regulatory proposals to deal with these issues.

Do you expect Russia to introduce a legal requirement for identification of cryptocurrency users? Tell us in the comments section below.

Euro Inflation Hits Record Highs, ECB Not in Rush to Raise Interest Rates

Euro Inflation Hits Record Highs, ECB Not in Rush to Raise Interest Rates

The European Central Bank is concerned over inflation in the euro area rising beyond its own expectations, a high-ranking ECB official has admitted. However, Europe’s monetary authority is not prepared to raise interest rates at this point in time, the executive unveiled.

ECB Sees No Reason to Adjust Interest Rates Despite Eurozone Inflation Reaching 5%

Annual inflation in the area of the common European currency, the euro, has increased for a sixth consecutive month to a record high of 5% in December, according to preliminary estimates from Eurostat quoted by Trading Economics. The last time inflation declined was in June when it fell to 1.9% from May’s 2%.

Source: Trading Economics

“We view these figures with some concern, as they are higher than we initially expected,” Isabel Schnabel, member of the Executive Board of the ECB, commented in a recent interview with Süddeutsche Zeitung. The official also recognized the worries of many people in Europe about the drop in real wages and interest income.

Nevertheless, Schnabel made it clear the regulator is not ready to raise interest rates in the eurozone for now, citing forecasts indicating that the inflation spike caused by the global pandemic will be followed by a “marked decline.” The banker also pointed out that the ECB should avoid choking off the economic recovery and stated:

In our projections, medium-term inflation will even fall back below our target of 2%, even though we acknowledge that the projections are now subject to great uncertainty.

European Central Bank to Act if Inflation Settles Above 2%

The representative of the ECB executive body also assured that the euro area’s central bank “will act quickly and decisively if we conclude that inflation may settle above 2%.” She remarked that a precondition for lifting rates up is to end net asset purchases.

Schnabel referred to the decision of ECB’s Governing Council in December to gradually reduce them over the coming quarters as the first step in that direction. The plan is to discontinue those under the Pandemic Emergency Purchase Program at the end of March 2022.

The official dismissed criticism that inaction on the part of the ECB reflects its fears that the euro debt crisis might flare up again, especially in countries like Italy, if interest rates are raised. “Our actions are guided solely by our price stability mandate. Public borrowing by individual countries has no bearing on the Governing Council’s decisions,” she insisted.

Eurostat’s data and Schnabel’s comments come as other major economies are also registering surging inflation after measures to deal with the economic fallout of the Covid-19 epidemic. Numbers published by the U.S. Labor Department on Wednesday showed that the consumer price index rose to 7% last month, as Bitcoin.com News reported. That’s the largest annual increase in the past four decades.

Do you think central banks around the world will eventually raise interest rates in response to growing inflation? Share your expectations in the comments section below.

Gift to Pope Francis Sold as NFT Raises $80,000 for Afghanistan

Gift to Pope Francis Sold as NFT Raises $80,000 for Afghanistan

A carpet presented by the United Arab Emirates as a gift to the head of the Catholic Church a few years ago has been sold in the form of NFT. While the original remains in the Vatican, its digital representation has been successfully used to collect funds for the people of Afghanistan.

NFT of Historic Carpet Sold for 25 ETH

The Pontifex carpet was gifted by the Crown Prince of Abu Dhabi Sheikh Mohamad Bin Zayed Al Nahyan to Pope Francis during a visit to the Vatican City. In September 2016, the two met to discuss the strengthening of the diplomatic relations between UAE and the Vatican as well as the promotion of inter-religious harmony.

On Friday, a non-fungible token (NFT) representing the carpet was sold for 25 ETH, close to $82,000, the Dubai-based Khaleej Times reported. The money raised through the sale will be used to support vulnerable families in Afghanistan during the cold winter months.

The head of the Catholic Church will keep the physical version of the carpet, which was woven by Afghan women. The buyer of the NFT will receive a scaled down replica of the original created by Zuleya, the retail arm of Fatima Bint Mohamed Bin Zayed Initiative (FBMI).

The initiative was established in 2010 to bring a change to the harsh lives of Afghanistan’s women and children. FBMI invests in healthcare, education, and an array of social and economic reforms. It also provides employment opportunities in arts, crafts and agriculture.

Maywand Jabarkhyl, FBMI’s chief executive, described the NFT sale as a “crucial step forward” for the initiative. It would enable its team to showcase their designs to a global audience and also open new streams of revenue for local artisans in Afghanistan, he elaborated.

“This is perhaps the most iconic NFT to be sold in the Middle East,” said Musfir Khawaja, co-founder of Nftone, a marketplace based in Dubai International Financial Centre which listed the NFT. “The buyer will get the physical replica of the carpet besides an ornate gold frame on a 165 cm digital canvas with the NFT loaded on it,” he explained.

The token is one of six pieces showcased on digital canvases at the Abu Dhabi Art fair, alongside some of the best contemporary art in the world, the report added. Zuleya recreated the carpet as an NFT in partnership with the Morrow Collective NFT platform.

NFTs, which offer a unique way to reproduce digital files such as photos, videos, and audio and store them on a blockchain to prove authenticity and ownership, have been around for some time but their popularity began to grow in 2020. A recent report by Reuters revealed that NFT sales reached $25 billion in 2021.

Do you support NFT initiatives like the one described in the article? Share your thoughts on the subject in the comments section below.

Russia Busts Revil Ransomware Group on US Request, Arrests 14 Members

Russia Busts Revil Ransomware Group on US Request, Arrests 14 Members

Russian law enforcement agencies have dismantled the notorious hacking group Revil, believed to be behind ransomware attacks in the U.S. involving cryptocurrency. Although Moscow is unlikely to hand over Russian citizens to Washington, the operation has been carried out on request from the United States, despite heightened geopolitical tensions between the two powers.

Russia’s FSB Hits Cybercrime Group Revil

On Friday, the Federal Security Service of the Russian Federation (FSB) announced it has conducted raids against Revil in the capital Moscow, St. Petersburg, Leningrad, and Lipetsk regions, together with the Investigative Department of the Ministry of Internal Affairs (MVD). Law enforcement officers searched 25 addresses and detained 14 alleged members of the organized crime group.

Funds worth over 426 million rubles ($5.6 million) including cryptocurrency, $600,000 and €500,000, as well as crypto wallets, computer equipment used to commit crimes, and 20 high-end vehicles purchased with money obtained from criminal activities were seized, the FSB detailed in a press release, emphasizing:

As a result of the joint actions of the FSB and the MVD, the organized criminal community ceased to exist, the information infrastructure used for criminal purposes was neutralized.

FSB added that the arrested individuals have developed malicious software and organized the theft of funds from foreign bank accounts. Russian officials claim to have “established the full composition” of Revil and the involvement of its members in the “illegal circulation of means of payment and documented illegal activities.”

US Welcomes Russian Actions Against Hackers

Russia’s main law enforcement agency also said that the operation has been conducted on request of the respective U.S. authorities who shared information about Revil’s presumed leader and his part in attacks on foreign high-tech companies through malicious software used to encrypt data and extort money for its decryption.

The Russian Interfax news agency reported that the Tverskoy Court of Moscow has held two Russians in custody until March 13 — Roman Muromsky, a 33-year-old entrepreneur and web developer with no previous convictions, and Andrei Bessonov, alleged Revil hacker. They have been charged with committing crimes under Part 2 of Art. 187 — “Illegal circulation of means of payment” — of Russia’s Criminal Code. The MVD has asked the court for similar measures against another three detainees.

Revil has been blamed for high-profile crypto ransomware hits in the United States, including the one on the Colonial Pipeline which caused gas shortages on the American East Coast last May. Its perpetrators used ‘Darkside’ encryption software believed to have been developed by the group. Another case was the attack on the world’s biggest meat packing company, JBS, as Reuters reported in June.

In its announcement, FSB noted that Russia has informed U.S. authorities about the results of the operation. The United States welcomed the arrests, with Reuters quoting a senior official as stating: “we understand that one of the individuals who was arrested today was responsible for attack against Colonial Pipeline last spring.” A source familiar with the investigation told Interfax that Russia is not going to extradite any Revil members with Russian citizenship to the U.S.

Do you expect Russia and the U.S. to cooperate on other cases of cyberattacks involving ransomware and cryptocurrency? Tell us in the comments section below.

Head of Investigative Committee Calls for Mandatory Identification of Cryptocurrency Users in Russia

Head of Investigative Committee Calls for Mandatory Identification of Cryptocurrency Users in Russia

Russians who use cryptocurrency should not be anonymous, the man who chairs Russia’s federal investigating authority has recently stated. The official leading efforts to fight corruption in the government called for additional regulations, including the introduction of mandatory identification for those who transact with digital coins.

Anti-Corruption Official Pushes for Rules to Mitigate Risks of Using Cryptocurrency for Illicit Purposes

Alexander Bastrykin, head of the Investigative Committee of the Russian Federation, believes that people who use cryptocurrencies should not remain anonymous. The high-ranking official shared his opinion in an interview with the government-issued Rossiyskaya Gazeta.

“I have already noted that in connection with the adoption of the federal law ‘On Digital Financial Assets’ in July 2020, additional risks of using digital currency for criminal purposes may arise, in particular for financing terrorism and extremism,” Bastrykin, a former Deputy Prosecutor General of Russia, told the official newspaper. He elaborated:

Therefore, the circulation of digital currency requires further legal regulation — first of all, mandatory identification of users of such a currency is necessary.

The status of online platforms providing opportunities to buy and sell cryptocurrencies anonymously is yet to be determined as well, Bastrykin remarked. Websites offering crypto exchange services have had a lot of troubles with Russian regulators and judiciary in the past few years.

Digital coin trading is among a number of crypto-related activities that remains outside the scope of the current legislation on digital assets. A working group set up at the State Duma, the lower house of Russian parliament, is now preparing regulatory proposals to deal with the outstanding issues.

The Investigative Committee is Russia’s main federal investigating and anti-corruption authority, subordinate to the Russian president. It is responsible for combating corruption and conducting investigations into federal governmental bodies, local authorities, and law enforcement agencies.

In August, President Vladimir Putin signed a decree approving the country’s National Anti-Corruption Plan for 2021-2024. As part of the new strategy, the Russian head of state ordered several ministries and the central bank, to prepare inspections of officials who are obliged to disclose their digital asset holdings.

Speaking to RIA Novosti in December 2020, Alexander Bastrykin insisted that cryptocurrency should be recognized as property for the purposes of criminal law and procedures. He emphasized this is a necessary condition for investigating criminal cases in which digital currencies are involved. For example, those of bribe and embezzlement. In November 2021, the Prosecutor General’s Office of Russia proposed to define cryptocurrency as property in the country’s Criminal Code.

What are your thoughts on Alexander Bastrykin’s proposal to introduce mandatory identification of cryptocurrency users in Russia? Tell us in the comments section below.

Swiss National Bank Trials CBDC in Transactions With Five Banks

Swiss National Bank Trials CBDC in Transactions With Five Banks

The Swiss National Bank has successfully employed a wholesale CBDC to settle transactions with five commercial banks, the monetary authority announced. The tests are part of an experiment carried out together with the Bank for International Settlements and Switzerland’s financial services provider SIX.

Swiss Central Bank Tests Integration of Wholesale CBDC Settlement With Private Banks

A wide-range of transactions involving a wholesale central bank digital currency (CBDC) have been processed during the second phase of Project Helvetia, the Swiss National Bank (SNB) revealed in a press release issued on Thursday.

The trials are conducted as part of a joint initiative between the SNB, the Bank for International Settlements (BIS), and SIX, the main provider of financial infrastructure services in Switzerland. Five commercial banks also participated – Citi, Credit Suisse, Goldman Sachs, Hypothekarbank Lenzburg, and UBS.

The experiment, which took place in the last quarter of 2021, explored the settlement of interbank, monetary policy, and cross-border transactions on the test systems of SIX Digital Exchange (SDX), the Swiss real-time gross settlement system SIX Interbank Clearing (SIC), and core banking systems, SNB detailed.

The Swiss central bank and the other banks integrated a wholesale CBDC in their existing back-office systems and processes. SNB notes that in the future, a growing number of financial assets will be tokenized while financial infrastructures will run on distributed ledger technology (DLT). Regulators may need to cover tokenized asset markets in their monetary policies, the authority said and elaborated:

International regulatory standards suggest that operators of systemically important infrastructures should settle obligations in central bank money whenever practical and available. While none of the existing DLT-based platforms are systemic yet, they may become so in the future.

“To continue fulfilling their mandates of ensuring monetary and financial stability, central banks need to stay on top of technological change. Project Helvetia… allowed the SNB to deepen its understanding of how the safety of central bank money could be extended to tokenized asset markets,” added Andréa M. Maechler, member of the bank’s governing board.

The Swiss National Bank remarks that Helvetia is only an exploratory project, suggesting it should not be viewed as plan to issue a wholesale CBDC. In December, the SNB, along with the Bank of France and BIS, carried out another experiment, testing the application of wholesale CBDC in cross-border payments. Project Jura employed DLT and was also realized with the support of private sector companies.

Do you expect the Swiss National Bank to eventually issue a wholesale CBDC? Let us know in the comments section below.

Russia’s Tinkoff Bank Enters Crypto Space Through Swiss Company Acquisition

Russia’s Tinkoff Bank Enters Crypto Space Through Swiss Company Acquisition

The Russian neobank Tinkoff is joining the world of cryptocurrencies with the purchase of a stake in Aximetria, a Swiss-registered and licensed company which provides clients around the world with services and solutions for digital financial assets.

Tinkoff Bank Buys Stake in Aximetria

TCS Group Holding, the owner of the Russian Tinkoff Bank, has reportedly acquired a controlling stake in the crypto company Aximetria. Official numbers are yet to be announced but according to The Bell, which broke the news quoting financial market sources, TCS Group may now control up to 83.2% of the Swiss-incorporated entity which was founded by Russians.

Quoted documents from Aximetria reveal that on Nov. 9, TCS Group bought 4,449 shares at 100 Swiss francs ($110) each, and the total share capital of the company amounted to 534,700 francs. Its representatives told the news portal that the details of the transaction will be published in accordance with the established disclosure standards in the group’s annual reports.

Russia’s Tinkoff Bank Enters Crypto Space Through Swiss Company Acquisition

“Aximetria will develop as part of the international expansion of the Tinkoff Group in compliance with all the requirements of the jurisdictions of international presence,” the company added. Its website confirms the acquisition, noting that the startup is already part of TCS Group Holding PLC. It also points out that Aximetria was among the first companies to receive permission from the Swiss Financial Market Supervisory Authority (Finma) to process crypto transactions.

In an interview with CNBC last year, Tinkoff Group CEO Oliver Hughes stated that although investors who want to put money into cryptocurrency are qualified and know what to do, Tinkoff Bank is unable to provide them with such services because of the stance of the Russian financial regulator on the matter. “Currently, we don’t have a mechanism to offer them this product in Russia, because the Central Bank is taking a very tough position,” Hughes commented.

Deal Deemed Positive for Crypto Sector

Commenting on the acquisition, Nikita Zuborev, senior analyst at crypto exchange aggregator Bestchange.ru, told the Russian business news portal RBC that any inflow of capital from the traditional financial market into the crypto space can be regarded as a positive long-term factor and a certain guarantee for stability and acceptance. He emphasized that the deal will open another gateway between the traditional financial system and the crypto industry.

Maria Stankevich, director of development at Exmo, a leading cryptocurrency exchange in Eastern Europe, remarked that the purchase of a crypto startup by Tinkoff Bank’s parent company is “interesting and bold” for the Russian market. She expects this investment to compel other Russian banks, like Alfa-Bank for example, to think about similar opportunities.

Even after the adoption of the law “On Digital Financial Assets,” which went into force a year ago, cryptocurrencies and related activities are yet to be comprehensively regulated in the Russian Federation. The Central Bank of Russia remains opposed to their legalization and wants to restrict crypto investments for Russian citizens.

Recently, Russia’s largest and state-owned banking institution, Sberbank, also ventured into the crypto space by offering the country’s first blockchain ETF. The instrument was introduced to the market despite a statement by Bank of Russia’s Governor Elvira Nabiullina in October insisting that the monetary authority was not prepared to allow the trading of bitcoin ETFs.

Do you expect more Russian banks to acquire stakes in crypto companies? Tell us in the comments section below.

Russia’s National Finance Association Calls for Legalization of Crypto Investments

The main finance industry association of Russia has urged authorities to reconsider a position against crypto investments in the nation’s financial market strategy. The organization insists that the crypto investments of Russians should be brought out of the “gray zone” instead of being banned.

Finance Industry Body Urges Government to Regulate Operations With Crypto Assets

The Russian National Financial Association (NFA) has issued a call to amend the country’s Strategy for Development of the Financial Market of the Russian Federation Until 2030 in the part concerning investments in cryptocurrencies, RIA Novosti and Prime reported, quoting the proposal. The NFA unites over 200 entities active in Russia’s financial market.

The strategy now states that the Russian government and Bank of Russia will continue to oppose the use of “monetary surrogates,” a term often employed to describe decentralized digital currencies such as bitcoin. They carry high risks for citizens, according to the document, and may hinder the implementation of macroeconomic policies aimed at creating favorable economic conditions.

Operations with crypto assets remain “in the gray zone” despite the fact that investments of Russians in cryptocurrencies are significant, the self-regulatory body of the Russian finance sector noted. Foreign companies and unregistered intermediaries receive revenues from such transactions, the organization remarked.

The NFA believes that the option to provide Russian investors with access to digital financial assets through Russian professional market participants, as well as the possibility of creating exchange-traded mutual investment funds with cryptocurrencies for qualified investors, requires additional study.

The proposal comes after recent reports revealed that cryptocurrency is a popular investment choice for many Russians. According to the Russian Association of Cryptoeconomics, Artificial Intelligence and Blockchain (Racib), at least 17.3 million people in Russia have crypto wallets. In December, the head of the Financial Market Committee at the State Duma, Anatoly Aksakov, announced that Russian citizens have invested 5 trillion rubles in crypto (over $67 billion).

Bank of Russia has been a strong opponent of the legalization of cryptocurrencies in the country and wants to restrict crypto investments by blocking card payments to recipients such as digital asset exchanges. However, estimates quoted in the central bank’s own Financial Stability Overview for Q2 and Q3 of 2021 have indicated that the annual volume of digital currency transactions made by Russian residents amounts to around $5 billion.

Do you think Russian authorities will change their stance on cryptocurrency investments? Tell us in the comments section below.

Georgia Goes After Crypto Miners Using Subsidized Electricity in Historic Town

Georgia Goes After Crypto Miners Using Subsidized Electricity in Historic Town

A record high consumption of electricity blamed on illegal crypto farms in northwestern Georgia has caught the attention of authorities in the capital Tbilisi. The central government and the local utility are taking on the issue of dealing with power shortages in the mountainous region of Svaneti.

With Tourism Hit by Pandemic, People in Georgia Turn to Crypto Mining on Cheap Energy

The government of Georgia, a small nation in the Caucasus, has joined forces with the energy distribution company Energo-pro, to address the growing illegal use of electricity to mine cryptocurrencies in the Svaneti region. The move was announced by the country’s Minister of Economy and Sustainable Development, Natia Turnava, at a press conference this week.

The extraordinarily high power consumption by mining farms in the area of the historic town of Mestia has been a hot topic for a whole month now, the Novosti-Georgia news agency reported. Svaneti has attracted miners with its low electricity rates introduced for businesses working in the mountainous region. The population of Mestia has access to free electrical energy.

Until the end of December, residents of Svaneti had to put up with a limited power supply regime. Underground crypto miners have been blamed for the shortages and damages to the power grid. Minister Turnava commented:

Of course, illegal consumption of electricity is unacceptable, especially the problems with home mining which exists there. We are working with the local government, as well as with Energo-pro Georgia which supplies electricity to Svaneti, in order to gradually resolve this issue.

Residents of Mestia have held several demonstrations demanding the closure of the mining farms and accused local authorities of protecting the miners. Meanwhile, Energo-pro Georgia threatened to increase the electricity tariffs for the region. Despite this and the protests, consumption has not decreased yet.

“Compared to previous years, consumption has grown by 237% this year,” the municipality of Mestia revealed in a statement last month. The local authorities also urged residents involved in the minting of digital currencies to abandon the activity.

Natia Turnava expressed her hope that people in the region will not risk jeopardizing the tourist season. With beautiful landscapes, medieval towers and ancient traditions, Svaneti and Mestia have attracted thousands of visitors in the past decade. However, as the number of tourists declined amid the Covid-19 pandemic, locals have found an alternative income source in mining.

Georgia became a mining hotspot several years ago when the country ranked as the second most profitable location for bitcoin miners after China. According to a 2018 study by the Cambridge Center for Alternative Finance (CCAF), the nation also placed second in terms of electricity consumed for cryptocurrency mining. As of August 2021, its share of the global average monthly hashrate was 0.18%.

Do you think Georgian authorities will be able to solve the problems with electricity supply in the Svaneti region? Tell us in the comments section below.

Political Parties in Thailand Voice Opposition to Government Plan to Tax Crypto Gains

Political Parties in Thailand Voice Opposition to Government Plan to Tax Crypto Gains

As Thailand prepares to impose a levy on crypto profits, parties on both sides of the aisle have expressed concerns over the government’s current proposal. A number of political figures have insisted that important aspects need to be clarified in order to avoid double taxation of income related to cryptocurrencies.

Thai Politicians Warn About Negative Effects of Crypto Tax

Representatives of parties from various corners of the political spectrum in Thailand have shared their disagreements with the government’s plan to tax gains from cryptocurrencies. The reactions come after recent reports revealed that the Finance Ministry in Bangkok intends to introduce a 15% levy on profits from crypto investments and trading.

On Monday, the Revenue Department announced it will finalize the details of the tax by the end of January. Cryptocurrency miners, dealers, and investors will be affected if the proposal is passed into law, the Thai Enquirer writes in an article on Wednesday. Traders will have to keep a record of all their transactions to establish which ones require the withholding of tax.

Korn Chatikavanij, former investment banker, finance minister, and incumbent leader of the Kla Party, recently pointed out that all profitable transactions will be subject to the new tax. These profits, however, will also have to be combined with other income for annual tax returns, Korn explained, and stated on social media:

I disagree with the Revenue Department on collecting this tax until there is further clarification on issues of concern.

Then comes the value-added tax (VAT), he noted, elaborating: “The Revenue Department is collecting VAT like crypto is a product. Therefore, there will be a double VAT payment on cryptocurrency transactions where you have to pay the VAT when selling the product and paying another VAT from selling crypto in baht.”

Korn added that if the draft legislation is adopted, crypto sellers will have to pay VAT without being able to issue a receipt as the coins are often traded on platforms where the buyers are unidentified. He emphasized this is a reason why many countries, such as Singapore, Australia, and EU member states, are amending their laws to exempt crypto transactions from VAT.

Two other political organizations, Pheu Thai Party and Thai Sang Thai, have also raised concerns regarding the tax proposal. Last week, Pheu Thai Party’s registrar Jakkapong Sangmanee remarked that crypto traders are already obliged to pay personal income tax. The introduction of another tax on top, he said, will hurt retail investors while benefiting institutions.

“There is nothing wrong with a policy to collect tax on profits from digital assets, as long as it is fair and does not take advantage of taxpayers,” the leader of the Thai Sang Thai party Sudarat Keyuraphan commented this week. At the same time, the government does not see the chance to raise income in the country by promoting digital assets. This, in her view, will block an income opportunity for the new generation.

Do you think Thailand will adopt the new tax on capital gains from cryptocurrency? Share your expectations in the comments section below.

Digital Yuan Wallet Ranks Among Most Downloaded Apps in China

Digital Yuan Wallet Ranks Among Most Downloaded Apps in China

The new wallet of China’s state-issued digital currency has quickly become one of the most downloaded applications in the country, within days of its launch. Its use and integration with other apps have contributed to an increase of digital yuan payments, media reports unveil.

Wallet Launch Boosts Digital Yuan Ahead of Lunar New Year and Winter Olympics

In the week after it was offered to the public, the digital yuan (e-CNY) wallet has placed among China’s most downloaded apps. On Wednesday, a day after its premiere, its downloads exceeded those of Tencent’s Wechat, and it became the most popular app on Apple’s iOS, the South China Morning Post reported, quoting market researchers. By Monday, it was also the second most downloaded financial app in Xiaomi’s app store.

The e-CNY app is widely available for download but at the moment it can be used only in select areas. The Digital Currency Research Institute of the People’s Bank of China (PBOC), the developer of the software, is collaborating with authorities in 10 pilot cities including Shanghai, Shenzhen, Xiongan, Chengdu, Suzhou, and Beijing, where it has handed out digital yuan amounts as part of red envelope campaigns.

The launch of the application is part of efforts to promote the Chinese central bank digital currency (CBDC) ahead of the Lunar New Year which begins on Feb. 1, a popular time for gifting red packets, the publication notes. During the week-long holiday, the Beijing 2022 Winter Olympics will start on Feb. 4. Visitors at the venues in the capital will be able to use the e-CNY without having to open a local bank account.

The digital yuan can be spent through other payment apps as well such as Alipay and Wechat Pay, which account for 90% of China’s mobile payments market. The CBDC is also available in the applications of seven Chinese banks – Industrial and Commercial Bank of China, Agricultural Bank of China, China Construction Bank, Bank of China, Bank of Communications, Postal Savings Bank of China, and China Merchants Bank.

According to a report by China.org.cn, e-CNY payments have seen a “stratospheric rise” in the past week since the currency became available across Chinese mobile apps. The state-run news portal quotes the local services company Meituan which registered an increase of almost 43% in digital yuan-denominated payments, following an integration between its app and the e-CNY wallet. The value of transactions also spiked, by more than 64% over the week before the launch.

China’s digital yuan is arguably the world’s most advanced CBDC, ahead of similar projects in the U.S., EU, and Russia. An official at the PBOC revealed in November that the digital currency had been used in transactions worth nearly $10 billion. As of October, around 140 million Chinese residents had opened a digital yuan account. While promoting the e-CNY, the government in Beijing launched a nationwide crackdown on cryptocurrencies and related activities last year.

Do you expect a further increase in the use of the digital yuan wallet app and currency? Let us know in the comments section below.

Iran to Permit Use of Cryptocurrencies in International Settlements, Reports Reveal

Iran to Permit Use of Cryptocurrencies in International Settlements, Reports Reveal

Authorities in Iran are preparing to allow the employment of cryptocurrencies for international settlements. According to local media, central bank and government officials have given the green light to adopt a mechanism using digital coins in the field of foreign trade.

Businesses in Iran to Be Able to Pay Foreign Partners With Crypto

Iranian companies will be allowed to use cryptocurrencies in settlements with partners in other countries, local media reported. An agreement to that end has been reached by the Central Bank of Iran (CBI) and the Ministry of Industries, Mining and Trade. Quoted by the Financial Tribune, the head of the Trade Promotion Organization of Iran, Alireza Peyman Pak, announced:

We are finalizing a mechanism for operations of the system. This should provide new opportunities for importers and exporters to use cryptos in their international deals.

According to the Iranian news agency IBENA, Pak, who is also deputy minister of trade, took to social media to provide details about the first meeting of a joint foreign exchange working group between his department and the CBI. The participants approved a number of measures to facilitate Iran’s foreign trade, including the adoption of the crypto mechanism.

A follow-up report quotes the same official as saying that the Trade Ministry will produce a plan within two weeks for the use of locally mined cryptocurrencies and coins acquired by private companies to pay for the import of goods. The initial proposal comes from the Central Bank of Iran.

Pak emphasized that cryptocurrencies and blockchain systems have many practical applications and if Iran ignores them, it will lose business opportunities. “In some of our target markets, especially in countries such as Iraq, Afghanistan or Pakistan, there may be restrictions on using cryptocurrencies, but in our major markets such as Russia, China, India and Southeast Asia, using cryptocurrencies is common,” he elaborated.

Besides mining, which was legalized in 2019, Iran’s crypto space remains largely unregulated. In April, the Central Bank of Iran (CBI) authorized domestic banks and money exchangers to use locally minted digital coins to pay for imports to the sanctioned nation. However, Tehran authorities have been going after crypto trading and payments in the country.

Cryptocurrencies have enjoyed a growing popularity in the Islamic Republic, with up to 12 million Iranians holding one coin or another, according to a recent estimate. Some officials have opposed restrictive policies, insisting these could push innovations underground. Limitations will deprive the nation of opportunities, Iranian fintechs warned in May, pointing out that local companies have managed to bypass the economic blockade with crypto transactions.

Do you expect Iranian businesses to expand the use of cryptocurrencies in foreign trade? Tell us in the comments section below.

Kazakhstan Is Stabilizing, Government Claims as Crypto Miners Look to Future in Country

Kazakhstan Is Stabilizing, Government Claims as Crypto Miners Look to Future in Country

The situation across Kazakhstan, hit by anti-government protests in the first week of the year, is normalizing, central authorities claim. The country’s massive crypto mining industry, which faced an internet blackout during civil unrest on top of power shortages, now hopes that the country will nevertheless remain an attractive location for miners.

President Tokayev Has Nation Under Control

After days of turmoil, the embattled administration of Kazakhstan’s President Kassym-Jomart Tokayev says it now has the country stabilized. Law enforcement agencies have retaken all administrative buildings that were attacked by protesters and communal services are being restored, officials informed the head of state during a meeting on Sunday, according to a released statement.

The troubles in Kazakhstan began on Jan. 2 with demonstrations in the western Mangistau province against the increase of prices of natural gas and other fuels which turned into mass political protests engulfing the Central Asian republic. An unconfirmed number of people have died in the clashes and 5,800 individuals, including foreign nationals, have been arrested, official sources indicated.

Tokayev has been quoted as emphasizing that the security forces will implement all necessary measures to fully restore public law and order in the country, Russian news agency Interfax reported. The president has issued an order to establish a special government commission tasked to address the consequences of the riots in the affected regions.

Despite Challenges, Crypto Miners See Future in Kazakhstan

With its low, capped electricity rates and generally positive attitude towards the crypto industry, Kazakhstan attracted numerous mining companies amid the massive exodus caused by the government crackdown on the sector in China since May 2021. However, the influx of miners, which increased the country’s share in the global bitcoin hashrate by over 18%, has been blamed for a growing deficit of electricity, exceeding 7% in the first three quarters of last year.

According to the Data Center Industry and Blockchain Association of Kazakhstan (NABCD), which unites two-thirds of the legal miners in the country, the riots have not affected the regions where official crypto mining companies are operating. The recent decrease in the bitcoin hashrate was caused by the temporary internet outages, the industry organization explained in a press release provided through Coinstelegram, insisting that the effect the current situation has on the sector and crypto prices is a short-term one. NABCD President Alan Dorjiyev commented:

At the current time, the companies, members of the Association, work as usual. For our part, we are working to ensure that the social responsibility of business makes a positive contribution to the lives of residents of the regions where the data centers are based.

“In a strategic perspective, Kazakhstan will remain one of the most attractive areas for the development of cryptocurrency mining,” the NABCD believes. It assures it’s now maintaining dialogue with relevant government authorities and announced that previously imposed restrictions on electricity supply have been relaxed for legal mining entities. The news comes after a report in December revealed that some mining businesses have started to move equipment out of the country due to power outages.

Do you expect Kazakhstan to remain a major crypto mining hotspot? Tell us in the comments section below.

Kosovo Seizes Hundreds of Crypto Mining Machines in Crackdown

Kosovo Seizes Hundreds of Crypto Mining Machines in Crackdown

Police in Kosovo seized another batch of over 200 mining devices as part of raids that started on Thursday. The offensive against underground crypto farms was launched after authorities in Pristina banned the power-hungry minting of digital currencies amid an energy crisis in the country.

Authorities in Kosovo Confiscate Mining Hardware in Serb Majority North

Law enforcement officers in Kosovo have confiscated hundreds of mining machines as part of efforts to curb crypto mining activities in the face of electricity shortages. One person has been arrested in the latest police operation in the predominantly Serb northern part of the country.

A statement issued by the Kosovo police revealed that the authorities have seized 272 devices used for the production of cryptocurrency in the municipality of Leposavic, AFP reported. “The whole action took place and ended without incidents,” Interior Minister Xhelal Svecla noted in a post on Facebook.

Finance Minister Hekuran Murati also took to the social media platform to point out that the estimated monthly consumption of the mining equipment is as much as the power used by 500 homes, worth between €60,000 and €120,000 euros. Murati also stated:

We cannot allow the illegal enrichment of some, at the expense of taxpayers.

The new seizure has brought to 342 the total number of mining rigs confiscated since the raids against miners started earlier this week, data from the Ministry of Interior shows. The crackdown began after the government in Pristina halted all mining operations on Tuesday, citing the growing power deficit in the cold winter months.

Mining Crackdown Threatens to Increase Ethnic Tensions

Amid the government offensive on mining facilities, tensions have been running high between the central government of Kosovo, dominated by ethnic Albanians, and the ethnic Serbs who form a majority in four municipalities in the north of the partially recognized republic in South East Europe. Serbs do not accept the authority of Pristina and have not paid for electricity in over two decades, since the 1998 – 1999 Kosovo war.

The country’s public utility is still covering their bills from its own revenues and according to estimates quoted by local media, the total amounts to €12 million a year. The current energy crisis, exacerbated by insufficient local generation and rising import prices, brought the issue to the forefront. Police have also carried out two raids in ethnic Albanian majority areas, seizing 70 mining devices.

The crypto mining ban was presented by Economy Minister Artane Rizvanolli as an emergency step, along with other measures proposed by a special parliamentary committee. However, critics have raised doubts about its legality as the minting of digital currencies is not prohibited by the current legislation. A draft law on cryptocurrency regulation submitted to the parliament in October is yet to be adopted.

Do you expect authorities in Kosovo to continue their crackdown on crypto miners? Share your thoughts on the subject in the comments section below.

Ruling Party Sources Deny Plan to Levy 40% Tax on Crypto Yields in Turkey

Ruling Party Sources Deny Plan to Levy 40% Tax on Crypto Yields in Turkey

The government in Turkey does not intend to impose a 40-percent levy on crypto-related gains as has been alleged, members of the ruling AKP party have indicated to the local press. They have also emphasized that the current regulatory efforts are aimed at creating a sustainable environment for the blockchain industry.

Turkey to Establish Regulatory Base for Cryptocurrency Market

A legislative proposal tailored to regulate cryptocurrency trade in Turkey is likely to be submitted to the parliament in the upcoming weeks. Sources from the Justice and Development Party (AKP), the country’s ruling political force, have “strongly denied” allegations that authorities in Ankara are going to tax cryptocurrency gains at a rate of 40%, the Turkish newspaper Hürriyet reported.

One of the AKP representatives, the deputy leader of the party’s parliamentary group Mustafa Elitaş, commented on social media last month that the new law will serve to regulate Turkey’s crypto system, while “preventing malicious acts, protecting investors and countering grievances” as he put it. He remarked that drafts prepared by other institutions have also been mentioned by the media but stressed that the legislature will have the final say.

On Dececmber 29, Elitaş organized a meeting with 13 representatives of cryptocurrency platforms operating in Turkey at the parliament in Ankara. It was also attended by officials from the Treasury and Finance Ministry, the Banking Regulation and Supervision Agency (BDDK), the Financial Crimes Investigation Board (MASAK), and the Central Bank of Turkey. The participants voiced their support for the adoption of a regulatory framework that would allow further amendments to reflect changes in the space.

AKP Examines UK, US Crypto Regulations

According to a report by another major Turkish daily, Milliyet, senior members of the AKP have been reviewing current regulations in the U.K., U.S., and Japan this week. Achieving transparency, safety and auditability of crypto exchange platforms will be the first priority of Turkey’s own regulations, Hürriyet revealed, quoting party officials who chose to remain anonymous. Establishing a suitable financial environment to accommodate a growing blockchain sector is the next key goal, they added.

More than 30 crypto trading platforms are currently operating in Turkey, the publication noted, and the country’s crypto assets market is among the world’s top five with almost 5 million user accounts. The daily trading volume on the largest exchange, Binance, amounts to around $320 million. Last month, MASAK fined Binance’s Turkish platform, BN Teknoloji, 8 million lira (over $750,000 at the time) for violations established during liability inspections.

In May of 2021, MASAK issued a set of guidelines for crypto service providers, obliging digital asset exchanges to carry out identity verification of their customers and report suspicious transactions, including high-volume trading. The agency can impose fines on platforms that fail to fulfill their duties and even prosecute their owners.

The rules were adopted after two Turkish crypto exchanges, Thodex and Vebitcoin, suddenly stopped trading, inflicting losses on thousands of investors, and were targeted in anti-fraud investigations. In October, another platform, Coinzo, also closed down. The popularity of crypto trading and investing in Turkey has increased significantly amid the rising inflation of the lira, but crypto payments were banned by the Turkish central bank.

What kind of regulations do you expect Turkey to adopt? Share your thoughts on the subject in the comments section below.