Maintaining its strict perspective regarding crypto, the Central Bank of Russia (CBR), has issued a nationwide directive to the country’s stock exchange houses not to facilitate any virtual assets until they are registered. The bank was of the further view that the directives shall not be applicable upon the virtual assets which are issued by the Government.
Concerns of investors being victims of crypto fraud and illegal activities have been growing within the Russian Government. In order to play a vital role in the prevention of crypto crimes against Russian investors, the Government wants to prevent such crimes. For the prevention of crypto crimes, the Central Bank of Russia (CBR) has issued new directives. This time the directives were aimed at all the stock exchanges of the countries.
The stock exchanges have been specifically directed by CBR not to lend any support to crypto transactions or virtual assets’ trading. Particularly, those virtual assets whose primary source is an instrument of financial. CBR is of the view that virtual assets that are pegged with financial instruments are potentially riskier. The Russian investors could become victims of crypto fraud and bear loss because of their lack of knowledge and experience.
CBR is known for having no soft corner for virtual assets and this time too it has shown its misgiving against crypto. The bank has always maintained a stance that there is exorbitant speculation within virtual assets. Neither there is any transparency in the pricing mechanism nor is there any regulatory framework. In addition, because of virtual assets’ low liquidity, it can never overpower traditional fiat, claimed CBR.
However, the present directives have been issued in furtherance of the earlier recommendation which was too issued by CBR. Through these recommendations, exchanges were asked to refuse to trade securities of either kind (domestic and foreign) which are based on virtual value. Systematically, the bank had denied crypto exchanges to participate in trading relating to indices, forex, stocks, shares, and commodities.
The directives, which were issued in the form of a notice, also provided that the directives shall also be applicable upon tokenized crypto. The bank explained that tokenized crypto is not currency and instead “securities” as defined under the law namely “Digital Rights”. The bank clarified to stock exchanges that tokenized forms of crypto are neither legalized by the Russian Governor or by any other country.
Further notice was circulated amongst Russian asset managers by CBR. They too have been asked to exclude virtual assets from the mutual funds. The bank has further urged the trustees and the brokers to act responsibly and ensure educating the investors. The investors need to be told that there are unseen risks associated with crypto which should be considered prior to investing.
