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Bitcoin Government The Almighty Buck

Russia Will Ban the Issuing and Selling of Cryptocurrencies (forbes.com) 61

Posted by EditorDavid from the magic-internet-money dept.
A senior Russian official says an upcoming digital assets bill will ban the issuing and selling of cryptocurrencies.

Forbes reports: "We believe there are big risks of legalizing the operations with the cryptocurrencies, from the standpoint of financial stability, money laundering prevention and consumer protection," Russia's central bank head of legal, Alexey Guznov, told Russia news agency Interfax this week in comments translated to English via Google. "We are opposed to the fact that there are institutions that organize the release of cryptocurrency and facilitate its circulation," Guznov said, adding the coming bill "directly formulates a ban on the issue, as well as on the organization of circulation of cryptocurrency, and introduces liability for violation of this ban...."

However, Guznov admitted that Russia would not be able to completely ban bitcoin and other cryptocurrencies. "Nobody is going to ban owning cryptocurrencies," Guznov said, adding people will not be punished for owning crypto "if they made their deal in a jurisdiction that does not prohibit that."
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Russia Will Ban the Issuing and Selling of Cryptocurrencies More

Russia Will Ban the Issuing and Selling of Cryptocurrencies

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  • buy buy buy (Score:3)

    by bugs2squash ( 1132591 ) on Saturday March 21, 2020 @04:41PM (#59857502)
    buy them quick before they're banned everywhere and you can't get them any more.

      • Re: buy buy buy (Score:4, Interesting)

        by ClickOnThis ( 137803 ) on Saturday March 21, 2020 @06:37PM (#59857722) Journal

        Any currency is worth what you can buy with it. Period.

        Can you buy anything with bitcoin? Well, yes. Not easily in general commerce, but at the very least, you can buy other currencies with it that are in wider circulation.

        I once heard a currency expert on NPR say that bitcoin is a collective hallucination that some abstract concept has a value. He then quickly added that any currency is a collective hallucination that some abstract concept has a value.

        • He then quickly added that any currency is a collective hallucination that some abstract concept has a value.

          And unfortunately. that truism even extends to the fiction of so-called "intrinsic value", like with "precious" metals and "precious" stones.

          Any time there is barter, the buyer's "currency" only has as much value as the seller is willing to believe it has at the moment of a transaction.

          • Intrinsic value: meaning it has some sort of value in and of itself outside the financial system.

            Example: gold is usable in electronics. Diamonds have numerous industrial applications. Rubies, too. A piece of clear quartz you can find walking on a hike might be shiny and pretty to look at on your shelf.

            A bitcoin ... uhm... well the intrinsic value of a bitcoin comes from the property it has of uh... nothing. Bitcoin has no intrinsic value.

            • One might argue that the intrinsic value of something is the value that remains after you discount any market-related value. For example, the intrinsic value of gold per ounce would be what it costs to prospect, mine, and refine it. The intrinsic value of a stock option is the difference between the stock price and the strike price of the option. The intrinsic value of bitcoin is what it costs (in electrical energy) to create it and maintain its blockchain history.

              The market-portion of something's value mig

              • I was with you until you said bitcoin has the value of the electrical costs to produce it.

                The reason this is not so is because you can't convert your bitcoin back into the effort required to generate it aside from selling it to a greater fool (as in Greater Fool Theory). If a bitcoin could convert directly into electricity or some other kind of "work" then yes it would have that value.

                Outside finding another buyer there's just nothing to do with a bitcoin.

                Even a dollar bill will still have value after the

                • you can't convert your bitcoin back into the effort required to generate it

                  You can't convert gold back into the effort required to mine it either.

                  • Gold has intrinsic value that bitcoin dies not.

                    Gold is pretty
                    Gold is made into jewelry
                    Gold is used in industry
                    Gold used to be used in dentistry (maybe it still is? My dentist doesn't)

                    Bitcoin is not pretty
                    Bitcoin is not made int9 jewelry
                    Bitcoin is not used in industry
                    Bitcoin was never used in dentistry

                    Gold has intrinsic value.
                    Bitcoin does not.
                  • Just a note on value of gold, Miners are profitable at about $1200/ounce. They are trying to do better and my information is a couple of years old so lets say $1100/ounce (it varies from mine to mine but in effect that is a useful average.) If Gold is trading at $1400 to $1500/ounce then you are better with oil that Gold well until the price of oil crashed a few weeks ago.

          • Re: (Score:2)

            by lgw ( 121541 )

            Any time there is barter, the buyer's "currency" only has as much value as the seller is willing to believe it has at the moment of a transaction.

            The thing is, currency, even fiat currency, isn't much different from anything else people might trade. Almost all value comes from human preference. This is obvious in the case of, say, a painting, but even for food or building materials demand is dominated by what people expect/prefer over "could possibly be eaten" or "could possibly be used to build a house".

            Most of the value of gold comes from the fact that most humans think it looks nice, and most humans value social signalling and status signals. S

            • Terry Pratchett captured this extremely well with his book "Making Money", about the creation of paper currency in the essentially medieval economy of Discworld. The story captured both the concepts and the abuses of paper currency: the principles apply very well to cryptocurrencies.

            • The thing is, currency, even fiat currency, isn't much different from anything else people might trade. Almost all value comes from human preference.

              That is exactly what I was trying to say; thank you!

            • Mostly agree, but gold is not that rare - its a controlled supply chain to ensure about 1% and only that amount of new gold is minted each year, to protect the existing gold holders value. It definitely does have social value in much of the world. Gold coins with a Queen on it are legal tender, so its de facto and de jure money.

              > For BitCoin to lose its value, it would merely need to stop working to sneak wealth across national borders, or buy illicit goods.

              Uhh, Bitcoin is traceable and is used much much

              • Mostly agree, but gold is not that rare - its a controlled supply chain

                Bullcrap.

                Perhaps you are thinking of diamonds and the De Beers cartel.

                Nothing like that exists for gold.

              • Re: (Score:2)

                by lgw ( 121541 )

                Uhh, Bitcoin is traceable and is used much much LESS for sneaky stuff than the USD

                Even so, it's early growth, the only reason it got above $10, was the purchase of illegal stuff. It's still used that way quite a bit, that's just dwarfed by the main use - capital flight. The fact that it's a really bad idea never stopped anyone, especially not anyone who's buying something that's a really bad idea in the first place.

                Bitcoin and other cryptos are used for legit trade of real goods and services every day.

                Sure, and a Bitcoin might be worth a whole dollar thanks to that use! I hear someone bought a pizza once, but I'm not sure you can still do that. That's right up there wit

        • Any currency not backed by assets (gold) is only valuable because people think it is. If people decided the US Dollar was only worth half the going rate it would drop to that value. It really helps if your currency is required, for things like buying food or paying the taxman. So the government of Russia doesn't want you to stop using their currency in their country (lowers value), and doing business they can't track (taxes).

        • Re: (Score:2)

          by rtb61 ( 674572 )

          You can ban the conversion of crypto currencies into real currencies, ban those financial transactions and you zero out the imaginary advertising generated based on the illusion of rarity and worth created by limited mining. Once you ban the mass handling of transaction you force it underground and it losses it's entirely delusional marketing panache and the value is crippled. It becomes legally risky to advertise crypto currency services in a country and they will target them for prosecution for offering i

  • "We believe there are big risks of legalizing the operations with the cryptocurrencies, from the standpoint of financial stability, money laundering prevention

          Right! The Russian government or other oligarchs can't get their beak wet on crytocurrency money laundering, Only the regular kind.

    • Bitcoin is easier to trace.

      • It's easier to trace if you don't care about it being traced. As with conventional currency, there are countermeasures that can be used against tracing if you want to put in the effort and lose a little money in overheads. With conventional currency, there is the classic briefcase-of-banknotes. With bitcoin, you usually bounce it through a conveniently complex intermediary in a non-subpoena-able jurisdiction, like a gambling site.

    • I'm sure they're still allowed to liquidate stolen cryptocurrency!

  • How would that work? (Score:2, Interesting)

    by BAReFO0t ( 6240524 )

    Given that, with end-to-end encryption, to a government, cryptocurrency activities are equivalent to: "Hey, I'm sending you this file / network packet of random data."
    Where both ends might be servers in another country, merely controlled by a Russian citizen, unbeknownst to the government, and with no way to find it out.

    Empty posturing is all this is.

    Besides, it's only cryptocurrencies that allow generating imaginary and non-earned wealth (like with "mining"), that are a problem. (And people managing it, wh

    • They can stop the exchanges from useing banks / ca (Score:5, Interesting)

      by Joe_Dragon ( 2206452 ) on Saturday March 21, 2020 @05:10PM (#59857560)

      They can stop the exchanges from useing banks / cards in Russia.

      • What's to stop people from laundering (once again) through some other exchange that is allowed to operate in Russia?

        I get it. It's whack-a-mole for Russia. But people wouldn't do this if it weren't possible for the mole to avoid being whacked.

    • Are there _any_ cryptocurrency exchanges that are not actively involved in money laundering drug trafficking, slavery, extortion, murder, and theft of cryptocurrency from their clients? The leadership of Silk Road was specifically convicted of laundering money for heroin traffic, and of hiring a hitman to kill partners. These sorts of convictions of the leaders of the necessary crytocurrency exchanges themselves.

      Is there _any_ cryptocurrency exchange that declines to handle transications explicitly involvin

      • Your questions could be asked of any currency exchanges (without the 'crypto') as well, and the answer for most of them will be similar, including for the ones involving the US dollar.

        • Few bank founders actually attempt to murder their partners as Russ Ulbrict of Silk Road did. All in the USA are compelled to report various transactions of over $10,000, which makes large scale money laundering more traceable, and most cooperate with subpoenas for their client's bank records.

          Are there _any_ cryptocurrency exchanges that do not deliberately solicit criminal transactions? Can you name even one that cooperates with subpoenas to provide their client's transaction records, including those trans

        • Your questions could be asked of any currency exchanges (without the 'crypto') as well, and the answer for most of them will be similar, including for the ones involving the US dollar.

          But it is the "blind debtor", stuffing your money into some digital glory-hole aspect that makes this particular method of transacting "business" particularly and even uniquely-suited for nefarious purposes. Not that there's anything fundamentally wrong with that.

          But...

          It is one-particular transaction that is honestly worth eradicating Cryptocurrency from the Universe: Ransomware.

          If Cryptocurrency went away tomorrow, there would still be:

          1. Drug Trafficking.
          2. Child (and Adult) Sex-Trafficking.
          3. Convention

          • Re: (Score:2)

            by PPH ( 736903 )

            Ransomware.

            I wonder how many of these were Russian operations. And now will be sitting on piles of Bitcoin that they can't move. Of course, they can always solicit partners outside Russia to help them liquidate funds. Be prepared for the e-mails:

            Hello. Permit me to introduce myself. I am Ivan Dumbassky and I have recently received a large sum of Bitcoin which I have sudden need to liquidate. I am seeking partner in my new found wealth which you may become for an advance fee of .....

          • But there would NOT be:

            Ransomware.

            It simply would evaporate into nothingness overnight; or very nearly so.

            There would still be ransomware, but it would demand payment in cryptocurrency that isn't being supported any more and would direct you to a page that 404s, like the last "Your machine has been locked by the FBI" one i saw.

    • Re: (Score:1)

      by AHuxley ( 892839 )
      Same as it works in most advanced nations.
      The gov says no.
      Any trying legally gets reported and detected.
      Tax collection and banks have to be aware of sudden unexpected cash payments, bank account use.. To report sudden wealth not from a wage, approved method of moving wealth around..
      Just like banks all over the USA have to report attempts at structuring. ie they all have to report financial crimes.
      ie work, inheritance, investments is ok, . "cryptocurrency activities" is not.
      The "unbeknownst" part st
    • The same way as child porn and other low use, high risk shit goes down.

      In the US the FBI takes over the web sites and all users become known and fucked.

      In Russia they see your packets going to a known crypto site, kick in your door, break your jaw, array you, take all your shit, and send your sorry ass to Siberia.

      You think in either case a major government is going to say, '"oh gosh this nerd has encrypted his packets to this illegal site, so I guess we'll just have to move on! Nothing we can dooooo!"? Re

    • I guess you have not TFA. You can do whatever you want with crypto, except exchanging it back to FIAT. And that part is at least partially enforceable.

  • Bitcoin was down but now it's back in action for Russian black markets, as God intended.

  • Uses of cryptocurrencies (Score:3, Insightful)

    by klingens ( 147173 ) on Saturday March 21, 2020 @05:14PM (#59857566)
    Cryptocurrencies have mainly 2 reasons: circumventing capital controls (China, Venezuela, etc.) and as a speculation object to fleece some sheep. Third one would be buying illegal things of course which is kinda stupid since the transaction history is usually public, but I digress. So if Russia bans them, it means they are worried about outflow of capital.
    • Governments don't like competition for their own currencies, it dilutes things. It is pretty simple really. They may fear bitcoin (or some other cryptocurrency down the track) so I am sure the Fed would love to ban Crypto currencies but it is not really that easy in the US.

  • and he's pissed that someone got his money. No more!

    With Russian gangsters out of crypto, the price will probably drop further or remain low until they decide to get back in.

  • from the standpoint of financial stability, money laundering prevention and consumer protection,"

    Since when did Putin's government and the Russian oligarchs care about that? Powerful people in Russia that have tried to clean up their country have ended up penniless, dead, or both.

    What's their real angle?

  • What's old is new again (Score:4, Interesting)

    by RogueWarrior65 ( 678876 ) on Saturday March 21, 2020 @06:54PM (#59857762)

    When my mother was a child growing up in Soviet Russia, one of her neighbors was arrested and sent to Siberia because they had "old" paper money in the house. That currency had been "replaced" by new government-issued currency. It's not like the person could go out and spend the old money because nobody would take it.

  • Comment removed based on user account deletion
  • Hard for Putin's government to know what their "people" are doing, if they have access to currency they can't track.

  • AGAIN Russia ?!? (Score:4, Insightful)

    by BeerMilkshake ( 699747 ) on Saturday March 21, 2020 @08:36PM (#59858018)

    This is what, about the 5th time in a decade that Russia has banned, threatened to ban, unbanned and rebanned crypto. You'd think they could make up their minds...

  • Good luck with that. (Score:4, Informative)

    by biggaijin ( 126513 ) on Saturday March 21, 2020 @08:58PM (#59858070)

    Governments everywhere hate cryptocurrency because, like the Internet, they really can't control it.

    • Re: (Score:1)

      by tokul ( 682258 )

      Yes. Governments tend to hate uncontrolled and unaccountable money presses. There are some good reasons for that.

  • filthy pig countries like india, china russia who ban it will just drive work force and businesses away. We are already in globalization with people and businesses can go to anywhere on earth they want. If your country bans crypto that will just result those businesses leave your country. Jesus just how DUMB one has to be to become a russian polititian.

  • For their economy to collapse due to COVID-19

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