The Belarusian government has announced its intention to tackle the rising rate of cybercrime in the country by proposing legislation to ban peer-to-peer (P2P) transactions in cryptocurrencies such as Bitcoin. The Ministry of Foreign Affairs (MFA) of the Republic of Belarus made an official announcement on July 2, outlining the new legislation’s objectives and its impact on individuals involved in cryptocurrency exchanges.
Belarus cites high cybercrime rate
The decision to ban P2P cryptocurrency transactions comes in response to Belarus’s high rate of cybercrime. The MFA highlighted that local prosecutors have already taken action against 27 individuals offering “illegal crypto exchange services” since the beginning of the year, resulting in illicit earnings of approximately 22 million Belarusian rubles ($8.7 million). The authorities claim that P2P cryptocurrency services have become a preferred method for criminals to cash out and convert stolen funds and transfer money within criminal networks.
The proposed ban on P2P cryptocurrency trading represents a shift in Belarus’s previous stance on cryptocurrencies. In 2022, President Alexander Lukashenko signed a decree endorsing the free circulation of cryptocurrencies, including Bitcoin, in the country. This move aimed to foster the growth of the crypto landscape and attract businesses to the Belarus High-Tech Park (HTP), offering tax exemptions and a supportive legal framework for cryptocurrency-related activities. The message reads:
“The MFA is working on legislative innovations that prohibit crypto exchange transactions between individuals. For transparency and control, citizens will be allowed to conduct such financial transactions only through the HTP exchanges.”
However, the recent legislation to ban P2P transactions signals the government’s determination to combat cybercrime. The MFA plans to restrict individuals from engaging in P2P exchanges and limit transactions to registered HTP exchanges. This approach aims to enhance transparency and control over financial transactions, making it more difficult for criminals to withdraw and launder money obtained through illegal activities.
Despite the government’s efforts, skeptics doubt the effectiveness of banning P2P cryptocurrency trading. Similar bans in other countries, such as China, have failed to completely eliminate P2P channels used for crypto exchanges. Many cryptocurrency enthusiasts question the feasibility of enforcing such a ban and believe that P2P trading is deeply ingrained in the core principles of cryptocurrencies like Bitcoin.
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