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Putin Warns Cryptocurrencies Like Bitcoin Carry 'Serious Risks'

(illustrative photo)
(illustrative photo)

Russian President Vladimir Putin has called for regulation of cryptocurrencies such as bitcoin, saying they carry "serious risks."

"Cryptocurrencies are issued by an unlimited number of anonymous bodies," Putin said in the Black Sea resort town of Sochi on October 10. "Thus buyers of cryptocurrencies could be involved in unlawful activities."

He told a meeting of finance officials that digital currencies could be used in money laundering, tax evasion, and in the financing of terrorism.

The Russian president called for building a “regulatory environment” based on international experience that would defend the interests of business and the state and provide legal guarantees for those using the increasingly popular financial instruments.

"It’s also important not to put up too many barriers," Putin said.

Putin's sentiments were echoed by Central Bank First Deputy Governor Sergei Shvetsov.

Shvetsov told a conference in Moscow that the currencies were "dubious" and investors needed to be protected.

"We cannot stand apart. We cannot give direct and easy access to such dubious instruments for retail [investors]," he said.

Cryptocurrencies were created to offer a secure, digital method to conduct financial transactions, but they have been dogged by doubts and a more than 700 percent rise this year in the market capitalization of digital coins to $150 billion has exacerbated those concerns.

Russia has treated digital currencies as illegal because they are issued by non-state approved institutions, but Finance Minister Anton Siluanov said last month that the existence of such currencies had to be accepted.

"There is no sense in banning them, there is a need to regulate them," Siluanov said, adding that his ministry was working on a law including the registration of those willing to buy the virtual currencies.

With reporting by Bloomberg, Reuters, Interfax, and the Financial Times
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