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Local Bitcoin Automata Violate Law, Warns Russian Prosecutor

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Russian prosecutors in the state of Tartarstan issued a warning to a local businessman to install bitcoin wickets in two stores

In a statement released last week, the prosecutor's office in Kazan, capital of Tartarstan, said that he had "organized a check [investigation]" as a result of reports of two recently installed bitcoin terminals in the city. On November 3, an article in the Russian Business Gazeta publication highlighted a newly installed ATM in a grocery store. It is not known if the media report is related to the subsequent investigation.

"It has been established that bitcoin machines [the] were installed in two stores in the Novo-Savinovsky and Privolzhsky districts of Kazan", reads an excerpt from the website of the prosecutor's office. The terminals were installed by a company registered in Bashkortostan, transferred to a 34-year-old unnamed, presumably the owner of the store, under a lease agreement.

Currently, bitcoin and cryptocurrencies are not considered legal or illegal under Russian law. Yet this did not stop the prosecutor's office from auditing the case of two bitcoin wickets installed in the city.

An excerpt from the announcement, which indicates several possible violations, reads as follows:

During the audit, the prosecutor's office announced to the businessman an official warning on the inadmissibility of the violation of the law. Simultaneously, the information was sent to the Federal Tax Service Office for the Republic of Tatarstan to verify the possible violation of cash discipline and other violations of tax law, as well as the prosecutor's office to Ufa- to assess the legality of the tenant's activities.

Verification and investigation are currently underway, according to the prosecutor's office.

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The scrutiny of Bitcoin ATMs comes after Russian President Vladimir Putin's much-publicized remarks last month about cryptocurrency concerns. A high-level meeting between the Russian authorities and Putin has developed plans to control bitcoin mining in the country, followed by a mandate led by Putin to develop a framework for currency offerings and cryptocurrencies in Russia. President Putin also called for the Russian national cryptocurrency, CryptoRuble.

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