Russian Duma ponders exchange ban amid rising crypto demand from Beribit clients

Russian crypto exchange Beribit’s clients have reportedly taken over the company’s offices, requesting to retrieve their investments. At the same time, Russian Duma lawmakers have proposed a law prohibiting crypto exchanges in the country.

In late March, Russian authorities reportedly stormed Beribit, a licensed crypto exchange in Russia. This incident was allegedly linked to the Crocus City Hall terrorist attack. Beribit then announced via Telegram that they had discovered inconsistencies in their financial records during a leadership transition, prompting the need for an audit.

Beribit clients take action

Tensions are rising as over fifty Beribit clients have taken over the exchange’s offices. According to reports from the Russian news site Gazeta.Ru, these clients are demanding the return of more than $4 million of their funds. Social media is rife with videos showing customers receiving chocolate as a gesture, with assurances that their deposits will be sorted out within 1 to 15 days.

According to the report, Beribit’s staff were caught trying to escape through the back door before being halted by angry customers who called law enforcement. Beribit has since asserted that they’re working on processing withdrawals, with the first set of payments already distributed to clients. However, another report suggests that only those clients who reported to the police have received any funds.

Cryptocurrency exchanges under review in Russia

Russia’s lower house, the State Duma, is considering banning cryptocurrency exchanges. Government-registered crypto transactions and mining companies, however, would still be allowed. Additionally, the new bill aims to prohibit cryptocurrency advertisements, as reported by

An opposing lawmaker argued that the ban could harm Russia’s national security. He pointed out that cryptocurrencies are used to buy weapons and defense equipment from countries outside the Western sphere, bypassing sanctions and other limitations, per the report.

Russia plans September ban on Bitcoin

Starting in September, Russia is strictly banning the general use of Bitcoin and similar crypto assets. Anatoly Aksakov, a key government figure, leads this effort. The goal is to control the digital money space more tightly in these uncertain geopolitical times.

In anticipation of the impending legislation to constrain non-Russian crypto operations, Aksakov articulated the intent to bolster the ruble’s prominence. He emphasized that only digital financial assets issued within Russian jurisdiction and digital rubles will be authorized.

He conveyed the necessity of this embargo, attributing it to cryptocurrency’s current status as a quasi-currency that has begun to replace the ruble within the country. However, Aksakov affirmed that solely the Russian ruble fulfills the monetary unit’s mission, leading to this decisive action.

The law will make notable exceptions for crypto miners and test projects sponsored by the Central Bank, as crypto mining greatly contributes to Russia’s taxes. Statista’s data shows crypto miners generate more than $2.59 billion in cash flow for foreign trade deals in Russia.

However, Russian policymakers are brewing an intense internal debate regarding this approach. Artem Kiryanov, the Deputy Chairman of the State Duma Committee on Economic Policy, emphatically stressed the importance of precise regulations.

He asserts that cryptocurrency regulation must be clearly outlined in the digital code. He believes this will clearly define the conceptual framework and common judicial enforcement practice.

Russia’s mechanism for transaction monitoring

Since 2023, Russia has been diligently tracing cryptocurrency dealings. The Bank of Russia and the Russian Federation’s Federal Financial Monitoring Service (Rosfinmonitoring) have established a mechanism to associate normal cash transactions with cryptocurrency activities.

Rosfinmonitoring announced a new system during the Current AML/CFT Issues forum. This system, originally introduced in a pilot with five major banks, is designed to bridge the gap between traditional money and cryptocurrency transactions.

Ilya Bushmelev, a partner with Innotech and Rosfinmonitoring, pointed out this challenge.

This system might help banks establish stronger, more focused regulations and procedures for handling cryptocurrency, including a better understanding of their crypto clients and transactions.