Russian Police Seize 22 Cryptocurrency ATMs Under Central Bank Request

Russian police have recently seized cryptocurrency ATM machines under orders from the country’s central bank. According to local publication RBC, the ATM developer impacted by the seizure plans to appeal the action, and has incurred economic damage and costs to its reputation, said Sarkis Darbinian, an attorney for the Center of Digital Rights, which defends the company.

Artem Bedarev, head of BBFpro, told RBC the company does not understand the action and did not receive any preliminary inquiries from the prosecutor. Bedarev said one of the employees conducting the seizure said an investigation will take place for six months. The employee also said the Prosecutor General’s Office took the action based on a letter from the Bank of Russia.

The company operated 22 terminals in stores, bars and shopping centers in nine cities. An official from Snegir, a shopping center where a unit was installed, confirmed the seizure on Aug. 29. A Central Bank representative did not answer questions about the seizure. The representative did say the regulator performs systematic actions to determine and correct illegal financial activities. The chance for uncontrolled cross-border transfers brings the risk of cryptocurrency involvement in illegal financial activities, the representative said. Darbinian, the attorney for the Center of Digital Rights, said there is no rule against buying cryptocurrency, and that the company abides by statutory procedures, identifies users and pays taxes.

A partner at Taxology Mikhail Uspensky, a law firm, said cryptocurrencies are not regulated by special rules in Russia. Stanislav Sokolovsky, a senior lawyer at the GMT Legal law firm, said he believes cryptocurrencies are outside the legal arena. He said it is not clear how to record the currency on the balance sheet of the party making the exchange. He further noted that operations on “unregulated cryptocurrencies” risk being in violation of currency control rules, money laundering and terrorism financing.