The Bank of Russia Issues Warning on Initial Coin Offerings and Digital Currencies

The bank of Russia has issued a public statement at the dangers it sees inherent in initial coin offerings and digital currencies. The bank of Russia, the Russia’s central bank, posted a public note on its stance toward digital currencies and virtual token income, mentioning some of queries from traders and media about the growth in attention and adoption of digital currencies. The central bank showed that it monitors the digital currency marketplace and is maintaining to create a regulatory framework for digital currencies.

Russia's Central Bank

As such, Russia’s central bank is against permitting digital currencies or any associated economic tools in Russian Federation. The authority additionally reiterated an earlier announcement from January 2014, which explicitly compared bitcoin to a money surrogate, rendering it illegal within the Russia. The awareness also highlighted the excessive dangers involved in digital currency exchange because of sharp fluctuations, in addition to fundraising via initial coin offerings.

Excerpt from the central bank stated:

“Digital currencies are issued by a limitless circle of nameless entities. Because of the anonymous nature of the issuance of digital currency, residents and legal entities may be concerned in illegal activities such as legalization of proceeds from crime and financing of terrorism.”

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The statement added:

“Given the excessive danger of circulation and use of digital currency, the bank of Russia considers it untimely to confess digital currencies. As well as any economic tools nominated or related to digital currencies, to circulation and use at organized trades and in clearing and settlement infrastructure at the territory of the Russian Federation for servicing transactions with digital currencies and derivative economic tools on them.”

Mentioning the above, the central bank suggested residents to be aware about accelerated dangers while adopting or making an investment in digital currencies. The caution comes quickly after its Chinese counterpart’s move to impose a sweeping ban on initial coin offerings on Monday. Regulators from some of other nations such as Singapore, Hong Kong and US have additionally issued warnings of their own on initial coin offerings.

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