Russian Lawyers Warn E-pay Laws May Have Knock-on Effects for Bitcoin

Anonymity Bitcoin Cryptocurrency Privacy Regulation Russia

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Tim Alper

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Tim Alper

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Tim Alper is a British journalist and features writer who has worked at Cryptonews.com since 2018. He has written for media outlets such as the BBC, the Guardian, and Chosun Ilbo. He has also worked...

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June 26, 2023 06:54 EDT

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A new Russian law banning anonymous fiat deposits in e-pay wallets like PayPal may have an effect on crypto users, legal experts in the country have warned.

A new law governing digital payment systems came into force in Russia on August 3. The law forces operators such as PayPal and domestic rivals Yandex.Money, QIWI and WebMoney to block their customers from topping up their accounts anonymously. Many Russians have used payment terminals and cellphone operator-provided platforms to top up digital wallets.

Moscow said it has introduced the law in an effort to fight the financing of terrorism, money laundering, and drug trafficking.

But per RBC, although the new law makes no direct mention of crypto or crypto exchanges, experts said that ripple effects for the industry are “likely.”

The media outlet quoted Dmitry Kirillov, a senior lawyer at legal firm Bryan Cave Leighton Paisner (Russia) and a law lecturer at the Moscow Digital School, as stating that crypto exchanges remain “outside of the new regulations and are not subject to new restrictions.”

However, Kirillov noted that people who buy crypto assets though exchanges using ATMs will likely be hit.

He claimed that Russian banks will start looking closely at cash deposits made via ATMs and electronic payment systems.

The lawyer said,

“Russian banks and payment system operators will be obliged to comply with the new requirements and will stop crediting accounts from anonymous people who are making use of these channels.”

There are 53 Bitcoin (BTC) ATMs/tellers in Russia, while some of them support other cryptoassets too, according to Coin ATM Radar data.

Antonina Levashenko, member of the Commission on the Legal Support of the Digital Economy at the Moscow branch of the Russian Lawyers Association told the same media outlet that as the new law is related to strengthening standards in the fight against money laundering, crypto was also set to fall under government scrutiny.

Levashenko noted that a Financial Action Task Force (FATF) report last year concluded that there were “vulnerabilities” in Russia’s e-pay ecosystem “due to the risks of anonymity.”

The lawyer added that Russian regulators are hoping to boost the transparency of digital money systems as a result of these recommendations.

And although the new law does not pertain to crypto assets, “in the future, that is likely to change,” the lawyer concluded.