22 Bitcoin ATMs Seized In Russia On Orders From Russian Central Bank

Russian law enforcement officials have confiscated 22 BBFpro Bitcoin ATMs that had been installed in 9 cities across the country.

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Russian law enforcement officials have confiscated 22 BBFpro Bitcoin ATMs that had been installed in 9 cities across the country.

Local media reports indicate that the officers acted on the orders of the country’s Central Bank and the Prosecutor’s Office.

Police officers seized the Bitcoin automated teller machines from several stores, shopping malls, and restaurants in an operation that began Friday. According to the media and BBFpro representatives, the law enforcers did not give any explanation regarding the confiscation.

Artem Bedarev, the company’s CEO, says that he received informal communication (verbally) telling him that regulators would need at least six months to complete checks on the ATMs.

He added that the authorities have indicated that the machines will only be released once investigators complete the checking process.

According to officers privy to the case, the confiscation is part of the systemic checks and other regulatory measures that seek to identify and possibly counteract illegal activities within the financial market.

It is also possible that it could be due to concerns that cryptocurrency was being used in fraudulent schemes.

That, however, did not convince the Center for Digital Rights (CDR), a firm that provides legal representation and assistance to digital firms, cryptocurrency businesses, and blockchain-based projects.

It has termed the Central Bank and the Prosecutor’s Office’s actions as puzzling and unwarranted.

Sarkis Darbinyan, a lawyer with the legal firm, said that current Russian legislation does not prohibit the purchase of cryptocurrencies within the country. He added that BBFpro has always complied with regulatory requirements, including the payment of taxes.

Darbinyan also said that BBFpro is maintained high standards of transparency in its activities. This includes the practice of identifying users regardless of the fact that the company isn’t under any obligation to do so.

BBFpro has said that its legal team is assessing the extent of the damages suffered. The assessment will be in terms of reputational costs as well as financial damage. It will then launch an appeal.

BBFpro launched its services in January 2017 and its bitcoin ATMs supported the purchase of bitcoin (BTC) as well as other cryptocurrencies.

Users can buy bitcoins worth up to 15,000 rubles without providing any identification details. However, for purchases exceeding that amount, users must provide personal information like name, contact phone, date of birth, social security number, and ID or passport.

They also have to upload a selfie with the passport clearly visible. All these measures are aimed at reducing the chances of fraud and other illicit activities.

Law enforcers seized the BBFpro crypto ATMs less than a month after regulators said that they would introduce an analytical tool for tracking cryptocurrency transactions.

The authorities have over the years intensified efforts towards combating fraud and terrorism.

And the belief is that tracking of cryptocurrencies is one way of tackling the menace. The new system will also track individuals suspected of engaging in financial crimes.

However, at the moment, purchase of cryptocurrencies, trading, and mining remain unregulated in Russia. The Center for Digital Rights says that this is what makes the actions by the law enforcers hard to understand.

Malavita is yet another company offering bitcoin ATM services in Russia to face a similar case. In September 2017, the company had to shut down its operations in Kazan due to accusations by the Prosecutor’s Office that it had violated the law.

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