The task of imposing sanctions was made easier by changed Russian legislation, which required all market operators to legalize their operations and made liquidity provider addresses plus asset movements more transparent, explains an expert from the investment holding.
The owner of cryptocurrency that has passed through Russian legal platforms risks encountering requests to verify the origin of funds—or even outright refusal to accept transfers—on foreign platforms. Arbitrage opportunities between Russian and global platforms will shrink, and, as the Bits.media source put it, a “separate price circuit with a discount to international quotes” may emerge at this point.
In Russia, only Bitcoin, Ethereum, and the stablecoin USDT are legally permitted to be traded, by the decision of the Central Bank. It is entirely feasible to purchase Bitcoin and Ethereum on a Russian platform and store them on a hardware wallet—but experts from Finam believe that difficulties may arise when attempting to transfer them to an international exchange, use a foreign custodial service, or withdraw via foreign exchange platforms.
For USDT, he believes the risk is higher because the stablecoin’s issuer, Tether, is able to freeze its tokens on holders' addresses.
«Limits for non-accredited investors and a restricted list of available assets do not in themselves 'color' cryptocurrency, but may further reduce the depth of the internal market,» suggests Kirill Pitscov.
However, the Bits.media interviewee does not cite any specific provision of the changed Russian legislation that creates a market for “tainted cryptocurrency,” as “the risk arises from the combination of new regulation and the sanctions environment.”
Despite all this, the legal market will be in demand in Russia, believes a Finam expert. The reason: for the retail investor, key factors are purchasing with rubles, working through a familiar broker, legal protection, and clear tax reporting. More experienced investors will consider the price difference between crypto assets within the country (cheaper) and abroad (more expensive) and strive to maintain the ability to withdraw assets to their own wallet.
“Therefore, real demand largely depends on whether Russian participants can maintain working channels with external liquidity and prevent the legal market from becoming a completely closed system,” says Piscov.
Recently, Finam Group Chairman Vladislav Kochetkov expressed concern that in Russia, there is a risk of developing a separate, isolated cryptocurrency market of “painted cryptocurrencies” with a “significant discount to international benchmarks.”