Bitcoin has experienced constant push and pulls situations in Russia as the government keeps accepting and banning cryptocurrencies. This state of indecision has made it a little challenging to buy and use Bitcoin in Russia.
This article explains the state of Bitcoin in Russia and how you can buy Bitcoin easily and instantly.
Table of Contents
Is Bitcoin Legal in Russia?
When cryptocurrencies were introduced, the Russian government rejected them immediately. They claimed that digital currencies could be easily used to conduct criminal acts like money laundering and terrorism.
In 2020, Russia passed a new law that legalizes ownership of crypto assets like Bitcoin (BTC) but does not allow using the cryptocurrencies to make payments. This is a law that many financial institutions dealing with cryptocurrencies openly say that they don’t understand.
However, many Russians have embraced cryptocurrencies and are involving themselves in trading and taking advantage of the opportunities the crypto markets offer. Paxful reported an increase in Russian users taking part in crypto peer-to-peer trading in the year.
The new law doesn’t offer freedom entirely on the crypto assets. Still, it’s a step forward as the major players in the crypto and blockchain industry hope for a better future. With the exponential growth of DeFi, they can only hope that the government moves quickly to lift any bans against using crypto assets.
Bitcoin & Cryptocurrency Trading in Russia
It has not been easy for Russian investors to trade Bitcoin and Cryptocurrencies, owing to the murky legal statuses that hang over the crypto assets. In recent months, this situation has improved as the government is adjusting laws that govern cryptocurrencies ownership.
Investors can buy and sell cryptocurrencies on different crypto exchanges like eToro, peer to peer trading platforms like Paxful, and Bitcoin ATMs. A secure crypto wallet is necessary for storing the crypto assets purchased.
Even though the use of Bitcoin to make payments is prohibited, Russian Bitcoin traders prefer holding their funds in terms of cryptocurrencies because of the weakening Russian Ruble. There have been reports of increased cryptocurrency trading among the Russian during the coronavirus (COVID-19) pandemic.
Best Places to Buy Bitcoin & Crypto in Russia
As mentioned above, you can buy Bitcoin easily through crypto exchanges and peer to peer trading platforms. You can also buy them in Bitcoin ATMs that are distributed in major cities across Russia. We will discuss further in this article about Bitcoin ATMs that are available in Russia.
The best crypto exchange where you can buy Bitcoin in Russia is eToro, and the best peer to peer trading platform is Paxful. These two platforms are preferred because of their efficiency, security, and ease of operation.
Let’s discuss how you can use these two platforms to buy cryptocurrency in Russia.
How to Buy Bitcoin in Russia on eToro
eToro is a safe crypto exchange where millions of investors enjoy trading cryptocurrencies and other financial securities. Many people love it because it charges no trading fees and no deposit fees.
The first step is to create an eToro account, verify it and deposit funds into it. eToro allows a wide selection of the payment method to use. Choose one that is favorable for you and use it to deposit your funds. From there, you can easily buy Bitcoin using your account balance.
Most traders prefer eToro because:
It’s cheap to use as it charges no commissions on trades.
It provides all investors with a virtual portfolio to practice and observe market trends before going live.
It has a social trading feature that traders use to learn from each other and copy trades from successful traders.
It easy to buy Bitcoin on the platform owing to the uncomplicated and straightforward web interface.
It provides customers with a secure crypto wallet where you can store the cryptocurrency that you’ll purchase. This wallet is easily accessible and secured tightly to ensure that the crypto is safe.
Paxful offers a peer-to-peer marketplace where investors can buy and sell Bitcoin directly to each other. It’s a safe environment to transact as Paxful has heavily invested in securing the platform and protecting its users.
Here’s how to buy Bitcoin on Paxful:
Sign up on Paxful.com in few quick steps and verify your account. Paxful welcomes you with a secure Bitcoin wallet where you can store your Bitcoins.
Find an offer – Choose your preferred payment method, the Bitcoin amount you want to buy, and your currency, and then click on “Search for Offers.” Scan through the available offers, paying attention to the seller’s terms, and compare them to your requirements.
Start the trade – If you find an offer that pleases you, specify the Bitcoin amount you want to purchase and begin the trade. On the opened live chat, communicate with the seller to receive instructions on how to proceed with payment.
Get your Bitcoin – After completing payment, the seller releases the Bitcoin, which goes directly to your Paxful bitcoin wallet.
Paxful has become a favorite trading platform for traders because:
The transactions are fast and safe as the platform is tightly secured, and transactions go from the sender to the receiver in an instant.
There are over 300 payment methods that you can use to complete transactions.
The process of buying Bitcoin is easy and uncomplicated, even for a beginner.
At the time of this writing, the price of Bitcoin is as follows.
1 Bitcoin is equal to 3,352,603.93 Russian Rubles at the time of writing.
This price changes every so often because of the market volatility; therefore, check to get the updated price.
Cryptocurrency Scams in Russia
It’s alarming that several cybersecurity firms have reported a surge in crypto-related scams in Russia. This is after over 23,000 sites have been reported for their involvement in crypto scams as they focus on new investors in the market.
For example, some sites lured new investors by promising commissions to them if they complete online surveys. The scam required them to pay an entrance fee first that would be returned to them together with their commission. The payments were not delivered, and people were scammed of their money as the site made millions from it.
Here are some of the major scams that have been on the rise.
Bitcoin7 Hacking Incident
It happened in October 2011 where Bitcoin7 exchange servers were hacked, leading to huge losses. The hackers gained access to the user database and got away with funds belonging to clients.
Many people have since speculated that it could have been a stunt pulled by the Bitcoin7 management to tighten compliance terms and make it more difficult and costly to make refunds. It’s easy for such speculations to arise considering the lots of money that most Russians had invested in the exchange platform.
Even though Bitcoin7 promised better security by hiring personnel and improving technology, most people opted out as they had already lost trust with the exchange. At the moment, Bitcoin7 is not in operation.
MMM was Mavrodi’s idea, which meant “we can do much.” It was first propagated in 1990, scamming over 10 million Russians. It was a new form of the market economy that many Russians did not know about.
Millions of ignorant Russians invested their hard-earned money as they were guaranteed 1000% returns on all the money they invested. The fear of being left out pushed many to invest, and for a few years, they benefited from it. The Russian authorities came in and shut it down for operating a Ponzi scheme.
Several other schemes continued during Mavrodi’s life up until he died in 2018. The scan didn’t end there because now it has been incorporated into cryptocurrency. The Mavro dollar that was used in the first scam was translated into Mavro coins. Scammers help clients to create crypto wallets where they send MMM Bitcoins to exchange with Mavro coins.
If you’re starting out on cryptocurrencies and come across anything with MMM on it, stay away from it. They are very common even today, and most people go for them without thinking twice and end up losing their money. Be careful about the investment channels you choose when dealing with money.
Bitcoin Mining in Russia
Bitcoin mining is tedious and consumes a lot of electricity and computer power. It is a painstaking process that requires a lot of input to mine one Bitcoin. How do people go about it in Russia? Is it a deal someone would want to make?
In Russia, electricity costs $0.056 per kWh. The cost of a new Antminer S19 Pro is about $4,500. If you mine at 110 Th/s, using 3,250W, you will make losses amounting to $1,572 per year. These are huge losses that make many willing investors in Russia shy away from the mining process.
However, some go further and make arrangements with the hydroelectric power companies to get sufficient electric power. In return, the companies get a share of the mined lot. Not only that, there are Russian power producers like En+ are taking their chances and venturing into cryptocurrency mining.
En+ and BitRiver (a big Bitcoin miner) have created an ambitious alliance, which has led to the building of a new mining farm. In this new farm, En+ holds the majority shares of 80%, and BitRiver owns 20%.
The global crypto dominance is about to shift and move to Russia and other countries like Kazakhstan, the US, and Canada, which are competing for larger shares in the crypto market. This is happening as Russia is looking forward with the hope that their government will further relax the regulation on Bitcoin and other cryptocurrencies so that more people can involve themselves in the industry.
Bitcoin Popularity in Russia
Well, statistics show that only about 2% of Russians own Bitcoin. Although it’s not a conclusive number, it’s relatively low considering how big Russia is. It could be that some people who own Bitcoins are afraid to admit they do, primarily because of the government’s indecision on Bitcoin and cryptocurrency.
However, cryptocurrency exchanges and peer-to-peer platforms have reported an increase in users joining the crypto industry. Paxful reported a spike of over 350%. This shows that more people are getting to understand how cryptocurrency works and are entering the crypto wagon.
This increase could also have been attributed to the weakening of the Russian Ruble after the Covid-19 Pandemic. Russians are learning that they can earn more interest in cryptocurrencies than they would with their local currency.
Where Can I Use Bitcoin in Russia?
The government’s restrictions on the use of Bitcoin as a payment method have kept many stores and retailers away from accepting Bitcoin. Many cities in Russia are yet to accept Bitcoin, and so you can hardly see any Bitcoin activity in them.
Some of the cities where Bitcoin is accepted are in the South, some parts of the West, and the South-East. In the South, you can use your Bitcoin in Abakan, Novosibirsk, and areas near Kemerovo. In the West, you can use Bitcoin in Novy Urengoy and Magadan in the South East.
Some sites like coinmap.org can direct you on a map where you can access services and buy goods using Bitcoin.
Bitcoin ATMs in Russia
Regulations against Bitcoin have not stopped the crypto enthusiasts from establishing Bitcoin ATMs across Russia’s major cities. There are about 50 Bitcoin ATMs so far, and the number has doubled in the past year. This comes after the government slightly relaxed laws regulating the ownership of Bitcoin for the Russians.
The capital city, Moscow, has the most Bitcoin ATMs where each ATM can transact around $27,000 on average every month. Profits from each ATM are about $1,800. Other cities with Bitcoin ATMs are Kazan, Penza, Omsk, Chelyabinsk, Krasnoyarsk, Glazov, Magnitogorsk, Nizhny Tagil, Novosibirsk, Saratov, Stavropol, Tolyatti, Ufa, Yakutsk, Tomsk, Yekaterinburg, Voronezh, Yoshkar-Ola, Smolensk, Rostov-on-Don, Neftekamsk, Krasnoyarsk, Izhevsk, and Novokuznetsk.
According to coinatmradar.com, Russia ranks in the top ten countries with the most operational bitcoin ATMs. This number is projected to rise in the coming years even as Bitcoin mining activities are increasing in Russia and also more people are joining the Bitcoin industry.
Summary - Best Places to Buy Bitcoin in Russia Instantly
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