Russian residents are still trying to figure out how the flurry of crypto regulations being proposed or passed by the legislative arm of the government affects their crypto activities. Now more than ever, it is important to identify a legal and secure way of accessing and holding cryptocurrencies. Here, we will highlight all the requirements and processes involved in buying crypto in Russia.
Buy Crypto in Russia
A survey carried out by Binance revealed that 53% of its over 23,000 users in Russia believe that crypto can replace bank deposits in the future. This survey is a clear reflection of why Russia is ranked as one of the top three countries with the highest crypto adoption rates. Therefore, it comes as no surprise that Russian residents are spoiled with options when it comes to crypto gateways.
However, considering the love-hate relationship between the Russian government and crypto, it is advisable to understand the legal implications of owning and trading cryptocurrencies. The first thing you should have at the back of your mind is that the State Duma (the parliament) is currently working on implementing crypto tax rules. With that process ongoing as of May 2021, you should do your research to confirm how the proposed tax framework would affect your crypto activities.
There is also a restriction concerning digital assets imposed just on Russian civil servants — as a public official, you are not allowed to own digital assets. Lastly, the Bank of Russia recently released a directive stating that non-qualified investors can only buy 600,000 rubles (equivalent to $7,950) worth of cryptocurrencies in a year.
Apart from the legal aspects highlighted so far, there are other factors that you should consider before purchasing crypto.
The first is the availability of ruble-to-crypto trading pairs. It is easier to buy crypto when the exchange or trading platform of your choice accepts rubles. It’s also advisable that you opt for exchanges and wallets that support your preferred payment methods, use only reputable platforms and transfer purchased cryptocurrencies to personal wallets.
In January 2021, Russia-based exchange Livecoin allegedly suffered a hack and subsequently shut down its operations to the detriment of its users. Such incidents showcase the essence of sticking to trusted platforms when buying cryptocurrencies, as well as the importance of using a private wallet.
Another factor in buying cryptocurrency in Russia is the fairness of the pricing algorithm of the crypto gateway, exchange or wallet. Exchanges often hike the prices of cryptocurrencies, especially when they are paired with the ruble. You should ensure that the prices correlate with the current global pricing of digital assets when using a crypto exchange in Russia.
How to Buy Bitcoin in Russia
After you have done your preliminary research and considered the highlighted factors above, you are now ready to purchase your first digital asset. In this section, we will focus on the process involved in buying Bitcoin, since it is the most popular coin not only in Russia, but also in the world.
First, you must determine the level of privacy you are willing to forego. Note that you will most likely have to complete Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements before purchasing crypto on exchanges. Depending on the identity verification process adopted by the exchange, it might take you one or two days to have your profile verified. However, some exchanges allow users to make small purchases before imposing KYC requirements.
If you are opting to buy Bitcoin via a crypto exchange, then the first option that you could consider is Matbea. The exchange is located in Russia and allows users to buy Bitcoin directly with rubles. You can fund your account on Matbea via bank transfer or cash deposits. The added advantage that local exchanges like Matbea provide is that they support an array of payment methods popular in the Russian market. Always check the going price of Bitcoin on CoinMarketCap to make sure that the exchange is offering close to market rate.
Conversely, you could decide to go for a more established global exchange. An example is Coinmama. This exchange allows users to buy Bitcoin with debit or credit cards. Once you have registered and verified your account, head to the Bitcoin page to complete your purchase. Note that you would need to create a Bitcoin wallet address and enter it as your preferred destination for the purchased coin. Other options are Binance, OKEx and Bitfinex. They all have Russian interfaces, which is a plus when accessing their customer support channels.
Alternatively, you may prefer a peer-to-peer (P2P) network instead of using a conventional crypto exchange or brokerage service. Platforms like Paxful and LocalBitcoins let users buy Bitcoin directly from other users. Due to the flexibility of this architecture, p2p networks support a myriad of payment options including PayPal, gift cards, bank transfers and so on.
Lastly, there is an option of buying Bitcoin via a Bitcoin ATM. According to Coin ATM Radar, there are over 50 Bitcoin ATMs in the Russian Federation. Moscow is currently home to five of such machines. Note that Bitcoin ATMs offer a more privacy-focused purchase at premium rates.
How to Buy Ethereum in Russia
Much like the modalities involved in buying Bitcoin, the process of buying Ethereum is also straightforward. In most cases, the exchanges listed above also support the purchase of Ethereum with rubles. The only difference is that you need to create an Ethereum public address to store the purchased coins.
For P2P traders, you might discover that the platforms available for buying Ethereum are few and far between. There is also LocalEthereum, which is the Ethereum-focused version of LocalBitcoins.
When using centralized exchanges, you should not use the exchange wallet as your primary storage system for your coins. It is common knowledge that such platforms are susceptible to attacks. Therefore, the recommended crypto wallet offerings are either hardware wallets or non-custodial wallets. These wallets store your private keys on personal devices. With this, you have complete autonomy over your coins.
Conclusion
To crypto beginners in Russia, buying cryptocurrency may seem like a complicated process as a result of uncertainties arising from the introduction of new regulations and the storage requirements peculiar to digital assets. However, as seen in this guide, there abounds an array of simple and straightforward methods of buying cryptocurrencies. As for the legal aspect, regulatory clarifications expected to surface in the coming months (May 2021) will go a long way to help crypto proponents understand their legal obligations.