Russia's Central Bank Issues Warning on Cryptocurrencies and ICOs

The Bank of Russia, the country's central bank, has issued a new statement on the risks of cryptocurrencies and initial coin offerings.

Sep 5, 2017 at 3:35 p.m. UTC
Updated Sep 13, 2021 at 6:53 a.m. UTC

Russia's central bank has issued a new statement on the risks of cryptocurrencies and initial coin offerings (ICOs).

The Bank of Russia, according to a notice published yesterday, appears to be responding to the rising media profile of both ICOs – through which blockchain-based cryptographic tokens are sold in a crowdsale – as well as cryptocurrencies themselves within Russia. Indeed, even an aide to Russian president Vladimir Putin has said he is moving to hold an ICO of his own.

The statement notes the "high risks" of exchanging cryptocurrencies, as well as participation in ICOs (described as "a form of attracting citizens' investments").

The central bank went on to say that, at this stage, it won't greenlight any cryptocurrency trading on any official exchanges, nor would it approve the use of the tech for infrastructure purposes. At the same time, the Bank of Russia doesn't serve as a financial regulator in Russia; that role falls to the State Duma and the Ministry of Finance.

The Bank of Russia said (in a translated statement):

"Given the high risks of circulation and use of crypto-currency, the Bank of Russia considers it premature to admit crypto-currencies, as well as any financial instruments nominated or associated with crypto-currencies, to circulation and use at organized trades and in clearing and settlement infrastructure on the territory of the Russian Federation for servicing transactions with crypto-currencies and derivative financial instruments on them."

The statements come on the heels of China's move to ban ICOs and more tightly control the ecosystem of exchanges offering access to those token sales. As CoinDesk previously reported, China-based ICOINFO froze its platform last week ahead of the news, and is scheduled to begin returning money to users this weekend.

This morning, Hong Kong's chief securities regulators issued a warning of their own on ICOs, remarking that some tokens may constitute securities – echoing statements issued by officials in Singapore, Canada and the US in recent weeks.

Bank of Russia image via Shutterstock

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