According to the Russian Legal Information Agency (RAPSI), the Russian Supreme Court has ordered the Vyborgsky District Court of St. Petersburg to reconsider the ban imposed on a cryptocurrency informational website Bitcoininfo.ru. The site is one of many the Russian authorities have blocked. The directive from the Supreme Court could also determine the future of all currently banned crypto websites.
Russian Supreme Court Nullifies Previous Order
In the case of Bitcoininfo.ru in 2016, an application from the prosecutor’s office deemed cryptocurrencies as “a means of virtual payment and accumulation” that falls short of compliance with the country’s laws. As per the application, digital currencies subvert the country’s official currency, the Ruble. Bitcoininfor.ru were not in attendance at the trial and only discovered the ban when they were blocked.
Considering cryptocurrencies a threat, the Vyborgsky District Court banned blockchaininfo.ru, as the portal advocates the use of virtual currencies. The defense attempted to challenge the ruling but the court rebuffed the challenge. However, according to the RAPSI, the Russian Supreme Court has now invalidated the ruling and ordered the St. Petersburg District Court to convene and reconsider the plea against the ban.
Russia Remains Hostile to Cryptocurrencies
Despite Putin’s rhetoric about the country developing their own blockchain technologies, Russian authorities have banned forty similar cryptocurrency-related websites that primarily provide information on the sector. According to the Russian government, the free flow of information about crypto on the web could threaten to develop a “shadow economy”, hence the forced closures.
As per the prosecutors:
“Under such circumstances, crypto-currencies, including Bitcoins, are money surrogates, contribute to the growth of the shadow economy and can not be used by citizens and legal entities on the territory of the Russian Federation. Free distribution of information on e-currency causes the active use of cryptocurrency in the trade of drugs, weapons, counterfeit documents and other criminal activities.”
However, in March 2018, the St. Petersburg City Court reassessed the appeal and nullified the previous decision. The court released an order that those websites be unblocked, effective immediately. Recently, the Russian government also banned the cloud-based instant messaging service Telegram. That ban appears to have been largely ineffective, with many Russians continuing to use it.
On the ground, Russians appear to be enthusiastic about cryptocurrencies. A Burger King outlet in Moscow started accepting bitcoin late last year. The capital is also home to hundreds of bitcoin ATMs. But with the government’s persistently predatory approach, many Russian startups are scouting foreign jurisdictions to launch their startups, citing legal uncertainty in the country. Fintech startups will continue to move out of Russia unless the government is able to provide an environment more conducive to crypto innovation.
Will the Russian government change its position – contradictory as it is – on cryptocurrencies? Share your views in the comments section below.
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