Bad News for Cryptocurrencies from Russia: Two Altcoins Cited as Examples!

Russia, continuing its work on cryptocurrency regulation, is taking new steps to protect investors.

At this point, Russia is considering imposing additional fees on transactions of some cryptocurrencies, such as Tether (USDT) and Binance Coin (BNB). Russia states that its aim in doing so is to protect domestic investors.

Speaking to local news agency Izvestia, Russian Deputy Finance Minister Ivan Chebeskov stated that fees, advisories, and technical protection mechanisms could be introduced against unfriendly cryptocurrency transactions to protect Russian investors.

Ivan Chebeskov pointed out that the use of such cryptocurrencies could pose high risks for Russian users, and emphasized that additional protective measures were being considered, including economic incentives such as fees or recommendations to encourage citizens to hold other assets.

At this point, Chebeskov notes that the new cryptocurrency bill could include cryptocurrencies that are not considered friendly.

Chebeskov reminded that, according to the proposed legislation, Russian citizens who do not have qualified investor status will only be allowed to trade three cryptocurrencies: Bitcoin (BTC), Ethereum (ETH), and USDT.

Chebeskov stated that dollar-backed cryptocurrencies such as USDC and Binance’s BNB are considered higher risk because their issuers can have their assets frozen at the request of foreign authorities, and have therefore been removed from the list of cryptocurrencies available for retail investors to trade.

According to Chebeskov, the logic is quite clear. “Tether, the issuer of USDT, froze some funds at the request of law enforcement, including a $344 million freeze identified by US authorities. Circle, the issuer of USDC, also has the authority to freeze wallet addresses. Binance has already banned Russian users. In fact, Tether and USDT carry the same risk. Regulators were initially ready to completely ban USDT as well. However, due to objections from the industry, they kept access/investment open for USDT by adding protective measures.”

At this point, the Russian Ministry of Finance had previously considered removing USDT from the cryptocurrency market regulatory framework, but industry participants have indicated their willingness to assume the risks of using the instrument themselves.

*This is not investment advice.

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