The Corporate Law Group

Currency Controls

putinIt had to happen. A country with a shaky economy tries to prevent use of bitcoin as a means of currency control. As people flee your currency, you drag them back into it. That’s exactly what Russia is doing right now. Due to technological advances in oil drilling (thank you, again, tech!) the US is now the world’s largest producer of oil. That has brought oil prices down. Russia funded its entire hegemonic mess with oil revenue, so it is hurting. As the economy fails, Russians discover bitcoin, which is undebaseable. After all who wants Zimbabwean Dollars or Venezuelan Bolivars? Roskomnadzor, the Russian telecommunications regulator, blocked five websites saying that bitcoin, “contributes to the growth of the shadow economy,” i.e., one they do not control. The Russian action relates back to a September, 2014 court order, although just enforced recently. Last February those in control said that it would be illegal to use bitcoin as a substitute for money. Of course they mentioned money-laundering and terrorism, the government excuse de jour for reining in anything they don’t like. The head of the Crypto Currencies Foundation of Russia, Igor Chepkasov, said that he thought the action was “a dress rehearsal for the prohibition of bitcoin in Russia,” urging proponents of bitcoin to, “unite and fight for their rights.” Several of the sites said that no one had contacted them and pointed out that the September court order dealt with “cryptocurrency and the internet in general.” An Indacoin founder, who wished to remain anonymous, said his firm had already registered .net, .org and .io addresses which they would start using in place of their blocked site. It should give us comfort that the FTC has now involved itself in our Internet, NOT.