Russia rules Bitcoin to be illegal

By Danny Palmer
10 Feb 2014 View Comments
bitcoin-stock

The Sochi 2014 Winter Olympic Games are now well under way, but any visitors hoping to use Bitcoin at the event taking place in Russia are in for a disappointment, because the virtual currency has been banned by the authorities.

The ban has come from the Russian Prosecutor General's Office and applies to all virtual currencies including Bitcoin.

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"Systems for anonymous payments and cyber currencies that have gained considerable circulation - including the most well-known, Bitcoin - are money substitutes and cannot be used by individuals or legal entities," said the Prosecutor's General Office, as reported by Reuters.

"The official currency of the Russian Federation is the ruble. Introduction of other monetary units and money substitutes is prohibited," the statement added, citing Article 27 of Russian federal law.

The warning from the Prosecutor General's Office echoes a similar statement from Russia's central bank, which warned Bitcoin could easily be used by criminal gangs.

"Citizens and legal entities risk being drawn - even unintentionally - into illegal activity, including laundering of money obtained through crime, as well as financing terrorism," it warned.

Bitcoin, which although accepted by some as a means of payment, is yet to gain mainstream acceptance by governments and corporations as an established means of making purchases.

The virtual currency therefore isn't a stranger to controversy. Indeed, last week saw Apple ban Blockchain, the most popular Bitcoin wallet application, from its App Store. Apple only cited "unresolved issues" as the reason for shutting Blockchain down.

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