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September 14, 2018 @ 13:07 +03:00
Russia, one of the few countries alongside China and India to have restricted crypto trading, is seeing an increase in demand for over-the-counter (OTC) investment in Bitcoin and other cryptocurrency assets. According to local reports, the daily trading volume of major cryptocurrencies like Bitcoin and Ethereum in Moscow alone reach $50 million on peak days, which is relatively small in comparison to major cryptocurrency exchanges but large given the regulatory uncertainty in Russia.
Currently, investing in cryptocurrencies is not illegal based on local laws. Because cryptocurrencies are considered as properties, as long as the capital being invested in the cryptocurrency market comes from a legitimate source, it is technically legal for citizens and residents of Russia to hold cryptocurrencies.
Still, Russia has continued to see stagnation in the growth of its crypto market due to the lack of regulatory frameworks and policies. While it is legal for residents to invest in the market, it remains uncertain whether companies are allowed to operate crypto trading platforms. Previously, the Russian government drafted three legislations around cryptocurrencies and crypto-related businesses, addressing the legality of exchange operators and and cryptocurrency trading. But, the approval of the three bills were postponed to the end of 2018 and until the government definitely approves businesses to operate as cryptocurrency exchanges, the market will not see the emergence of regulated cryptocurrency exchanges.
Local OTC platforms that rely on global crypto exchanges to pool in liquidity into the cryptocurrency market of Russia charge 1.5 to 2 percent as commission rates, and are able to generate hundreds of thousands of dollars in daily profit, despite having about 20 active daily investors. China, unlike Russia, has strictly prohibited the trading of cryptocurrencies. Hence, it is not legal for local residents and citizens to purchase or hold cryptocurrencies.