Russian court begins to assess appeal on blocking of Bitcoin websites

Bitcoin has recently attracted the attention of key international figures who have the will to drive the virtual currency into the mainstream, including senior government officials, well-established venture capital funds, technology innovators and regulatory authorities in some of the world’s most coveted financial centers.

The US, Britain and Switzerland, three of the world’s financial markets powerhouses, have been instrumental in bringing Bitcoin out of the wilderness during its formative years and into a widely accepted digital instrument which has gained vast venture capital backing from top institutions and regulatory licenses in Switzerland and New York.

Russia, however, remains somewhat skeptical.

Yesterday it was reported by Russian bitcoin magazine ForkLog that a regional court in the town of Nevyansk, which is in the Sverdlovsk Oblast, Russia, had begun its scrutiny of an appeal petition to consider a cryptocurrency websites ban which was set in place by Nevyansk town court.

Yesterday’s convening represented the first session, and was attended by representatives from and that had previously been blocked by the national media watchdog, Roskomandzor, with a reference to a court order.

In addition to the industry representatives, the session was attended by a Prosecution Office attorney. The Prosecution Office filed a request to terminate proceedings in the appeal petition as the office did not require the sites’ blocking. Also, the Prosecution Office believes that the blocking of websites has to be performed on the basis of a particular demand which in fact had not been filed.

This appeal stems from an initial disdain which was shown toward Bitcoin by Russian authorities in  January this year, when Roskomandzor blocked a series of sites including with an order dated September 30 from the same court in Nevyansk having been cited as the reason.

Roskomnadzor’s Internet blacklist came into effect in late 2012, after Russian lawmakers passed legislation allowing the agency to blacklist websites without a trial. At the time, the authorities said the blacklist would be used to protect minors from websites featuring illicit activities.

At the time of the initial statement of intent to block Bitcoin sites by Rozkomandzor, Crypto Currencies Foundation of Russia (CCFR) Chairman Igor Chepkasov told CoinDesk the ruling is part of a much wider clampdown: “Given the remoteness of the region and the features of the ruling’s execution, a court decision issued on September 30th and in the register of blocked sites as of 13th January, we can safely say that this is a dress rehearsal for the prohibition of bitcoin in Russia.”

Roskomandzor preceded these actions by stating in January 2014 that “The Russian Central Bank has declared that Bitcoin usage is illegal under Russian federal law.”

Just one month later in February 2014, the Russian Prosecutor General’s Office was quoted as saying, “Cyber currencies, including the most well-known, Bitcoin, are money substitutes and cannot be used by individuals or legal entities.”

With the appeal now beginning to be heard in court against the backdrop of the Russian officials’ clear disapproval of the use of Bitcoin, Mr. Chepkasov’s perspective may be indeed representative.

In August last year, a matter of weeks weeks before the court ruling which led to the initial blocking of Bitcoin sites, the Russian Ministry of Finance drafted a law banning bitcoin.

Ministry officials later announced that Russia would pass the digital currency ban in the spring of 2015. However, in late December the country’s Ministry of Economic Development criticized the bill over its perceived vagueness and potential to harm retailers.

For the official court document, click here.

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