Crypto regulations, Russian style

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Crypto regulations, Russian style
Crypto regulations, Russian style

Russian police seized all the crypto ATMs of BBFpro, which were located in nine cities.

According to the head of BBFpro Artem Bedarev, the company did not receive preliminary inquiries from the prosecutor’s office and even has no idea what happened the crypto ATMs that belonged to the company.

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However, according to him, one of the police officers said that the check is carried out on behalf of the Prosecutor General’s Office on the basis of a letter from the Bank of Russia (Central Bank).

The company had only 22 crypto ATMs located in nine cities. On Friday, August 31, all equipment was seized.

Explanations by authorities

Representatives of the Central Bank did not say anything meaningful about the BBFpro crypto ATMs, however, they reminded that the regulator “is carrying out systematic work to identify and counteract illegal activity in the financial market”. One representative of the regulator stressed that the possibility of uncontrolled cross-border transfer of funds, as well as their subsequent cashing, entails the risk that the currency will be used in illegal financial transactions.

The advocate of the Center for Digital Rights, Sargis Darbinyan, who defends the interests of the company, noted that the actions of the authorities “cause bewilderment.”

It should also be noted that BBFpro is one of the largest networks of crypto ATMs in Russia, but not the only one. There is another major provider of such solutions – Malavita Corporation. This company develops a network of ATMs under the RusBit brand, develops software on its own, and plans to launch the Sensation Freedom crypto exchange.

Legal risks

According to Malavita, now the company does not have such problems as BBFpro. However, last fall, Malavita still had to turn down activities in Kazan. Then the prosecutor’s office came to the conclusion that crypto ATMs violate Russian legislation, also facilitating the legalization of illegal financial transactions. In general, the company believes that such cases are largely due to the lack of a regulatory framework that regulates the turnover of the country’s cryptocurrency.

In Russia, there are also several terminals under the brands of Austrian Trovemat, American Bitcoin Teller, Greek Bcash Greece Inc. According to the representative of Trovemat, in Russia, the turnover of cryptocurrencies is much less than in Europe and the USA.

Representatives of Malavita and Trovemat noted that devices for purchasing cryptocurrency are registered as vending machines that sell digital goods. When rendering a service, it is stipulated that they work “in test mode”.

In the US, the activities of crypto ATM operators are regulated in accordance with existing legislation, and such companies themselves are classified as providing currency exchange services. The operator must register with the Financial Crimes Network (FinCEN), and also commit to preventing money laundering.

According to coinatmradar.com, at the present time, 3651 crypto ATMs are installed in the world. Most of these devices (2201) are in the US. Russia ranks fifth in the number of installed crypto ATMs (79 pieces).