While Russian authorities struggle to define cryptocurrency and decide whether to ban it, regulate it or just ignore it, people buy and sell Bitcoins and other digital money on the black cryptocurrency market to the tune of millions of dollars on a daily basis.
Cryptocurrency trading is not considered to be illegal, but the process is not regulated in any way: the law neither allows nor forbids buying cryptocurrency or using it or pay for goods and services, or changing it for rubles and vice versa. That’s why it is sometimes wild and mindblowing, the Russian media outlet Vedomosti reports.
If you have extra liquidity and you want to change it for cryptocurrency, you have quite a few options, including peer-to-peer platforms and marketplaces that connect buyers and sellers keep things private and anonymous, street cryptocurrency exchanges and backstairs places from spy movies.
- P2P exchange platforms
The most popular P2P platform for cryptocurrency trading is Helsinki-based Localbitcoins with an average daily transaction volume of about 1000 BTC. The procedure is as straightforward as buying a secondhand vacuum cleaner: you get in touch with the seller, discuss the price, and fix the meeting, where you exchange your cash for some digital coins. It’s simple, easy and anonymous: no personal data is required, and the tax authority will never get after you. However, this comfort comes at a price as both buyers and sellers risk getting screwed or robbed.
Interesting fact: BTC/RUB is the most actively traded cryptocurrency pair at LocalBitcoins with average daily trading volume about $2 million, according to CryptoCoinCharts. And that’s even though the LocalBitcoins website has been banned by Roskomnadzor (Federal Agency for Information Technologies and Communications) since 2016.
- P2P exchange offices
They are considered a safer option as they usually provide a guarantee and fraud protection. There are several such crypto offices in Moscow that offer exchange services for a fee. It’s like a blast from the past: a guy with a suitcase packed with cash comes to the exchange office and leaves it with Bitcoins or other coins credited to the cryptocurrency wallet. The deal is considered to be closed when the buyer sees the purchased amount of cryptocurrency in his wallet. No questions asked, no documents required.
- Street money changers
It’s the wildest and the riskiest way to buy some crypto coins for hardcore thrill-seekers. You have to go to a shopping mall or a flea market, and ask for a “person” who trades cryptocurrency. According to the director of the financial monitoring department Yuriy Polupanov, the shopping malls “Sadovod,” “Food City” and “Moscow” are the largest epicenters of crypto-cash flows in Moscow with a combined estimated currency turnover of 600 billion rubles (about $8.8 billion), which is four times more than LocalBitcoins turnover.
The Central Bank of Russia dubbed shady retail trading as the main channel of illicit cash flows. This money is invisible to tax authorities, custom services or the central bank.
Roman Zabuga from Wirex cryptocurrency bank commented on the situation:
“Now we have the market of online exchanges. There is no legislation; consequently, these transactions are outside the legal environment. The legislators promise to prepare a legal framework by October 1, which will allow Russian citizens to exchange cryptocurrency. The draft bill on “Digital assets” has such elements as exchange operators. I suppose these are cryptocurrency exchanges that will be authorized to change digital coins for fiat money.”