Russian authorities say Bitcoin illegal

MOSCOW Sun Feb 9, 2014 4:24am EST

Some of Bitcoin enthusiast Mike Caldwell's coins are pictured at his office in this photo illustration in Sandy, Utah, January 31, 2014. REUTERS/Jim Urquhart REUTERS/Jim Urquhart

Some of Bitcoin enthusiast Mike Caldwell's coins are pictured at his office in this photo illustration in Sandy, Utah, January 31, 2014.

Credit: Reuters/Jim Urquhart REUTERS/Jim Urquhart

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MOSCOW (Reuters) - Russian authorities have issued warnings against using Bitcoin, saying the virtual currency could be used for money laundering or financing terrorism and that treating it as a parallel currency is illegal.

"Systems for anonymous payments and cyber currencies that have gained considerable circulation - including the most well-known, Bitcoin - are money substitutes and cannot be used by individuals or legal entities," the Russian Prosecutor General's Office said on February6.

It added that Russian law stipulates that the rouble is the sole official currency and that introducing any other monetary units or substitutes was illegal.

Russia's central bank also said on January 27 that Bitcoin trade was highly speculative and that the unit carried a big risk of losing value.

"Citizens and legal entities risk being drawn - even unintentionally - into illegal activity, including laundering of money obtained through crime, as well as financing terrorism," it warned.

The Prosecutor's General Office said it was working with the central bank and other law enforcement agencies to tighten regulations and prevent legal offences committed with the use of pseudo-currencies.

The Bitcoin community in the United States, far more developed than the one in Russia, has already come under intense scrutiny as authorities crack down on illegal activity carried out using the digital currency.

(Writing by Gabriela Baczynska; Editing by Robin Pomeroy)

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Comments (10)
watcher8 wrote:
Will the US ever ban bitcoin? Not as long as they can use it as flypaper for criminals and terrorists. Who cares what other threats it might pose. Citizens be damned as long as we are catching bad guys. It’s a free market, right?

Feb 09, 2014 8:20am EST  --  Report as abuse
J0eSmith wrote:
As usual people wrongly call Bitcoin anonymous. There is a public record of every transaction that ever took place and anyone, including law enforcement, can read it!

Steal bitcoins, then good luck trying to spend them, everyone would know where you spent them and could get your delivery address from the merchant!

Feb 09, 2014 12:31pm EST  --  Report as abuse
mitchellmint wrote:
Once again… the corporate giant VISA smears an alternate paying system with the “TAKEOVER your PAPER MONEY” scare tactic. But isnt that what VISA and JCB have already done? These people are suppose to be leaders and be capable of independent thought. BITCOIN is nothing more than VISA. The people who are creating the network are taking the risks, not the users. It just doesnt make sense… Unless VISA JCB are bribing.

Feb 09, 2014 7:49pm EST  --  Report as abuse
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