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Bitcoin Under Fire; Declared Illegal in Russia

Category: General News
Posted: February 10, 2014 08:31PM
Author: ClayMeow

The Olympics isn't the only news coming out of Russia. According to Reuters, on February 6, the Russian Prosecutor General's Office stated that, "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." Not only is the virtual currency often used to fund illegal activities, Russian law states that the rouble is the sole official currency in the country, thus any other currency is illegal.

This announcement comes just a couple weeks after Charlie Shrem, an operator of a bitcoin exchange company called Bitinstant, was arrested for money laundering. So is it only a matter of time before other countries follow Russia's lead? United States authorities have already been trying to crack down on illegal activity associated with bitcoin payments, so how long before major restrictions are placed upon it?

If that wasn't enough, a day after Russia's statement, bitcoin digital marketplace Mt. Gox put an indefinite halt on all withdrawals after it detected "unusual activity." As a result, bitcoin's value dropped as low as $500 early this morning before climbing back up to just under $600, but that's still well below Friday's closing price of $692. For comparison, in January it had topped $1,000. Ouch.

So if you are a bitcoin user or have been thinking about getting involved in it, you may want to tread carefully.

Source: Reuters [1] and Reuters [2]



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Guest comment
Richie on February 10, 2014 09:01PM
I guess Russia don't know what 'Decentralization' means?
slick2500 on February 11, 2014 12:15AM
All I know is I hate cryptominers right now, I wanted a R9 280x but I am not paying more than what a GTX 770 goes for for one.
ClayMeow on February 11, 2014 08:19AM
Very excellent point and something few talk about - the negative affect on video card prices.
slick2500 on February 11, 2014 01:42PM
Its ridiculous that we should have to pay out our buts for these cards to use them for what they were intended to be used for. If these cryptominers want cars for mining maybe they should ask AMD to make cards that are for that purpose and not steal our graphics cars.

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