Roskomnadzor, the Russian agency charged with monitoring all communications within the country, has blocked access to LocalBitcoins.com, the largest P2P digital currency marketplace in the world.
“For us, as well as for you, this decision was very unexpected,” said LocalBitcoins.The ban comes at a time when the popularity of the digital currency within the Russian Federation is surging. Last week, LocalBitcoins weekly volume in Russia set a 9th consecutive record at 237,834,818 Russian rubles ($3,671,748.62). The only other country that comes close to the rapid growth seen in Russia would be Venezuela, which set its 2nd consecutive weekly volume record on LocalBitcoins last week.
Charts from Coin.dance illustrate the rapid growth of LocalBitcoins turnover in Russia:
LocalBitcoins responded by issuing instruction in Russian on their blog on how to use a VPN service (IPVanish, Mullvad, NordVPN) to circumvent the blockade:
“It is not recommended to use a free VPN services, because they can keep track of your traffic that is not safe. If you do not want to pay for VPN services, we recommend that you begin to use the TOR browser (TOR browser) to access the LocalBitcoins.com”And LocalBitcoins isn’t the first bitcoin-related site to face the wrath of Roskomnadzor. In May of last year, the agency blocked access to Russian news site BitNovosti.com, Btcsec.com and Bitcoin.it. Earlier this year, Roskomnadzor blocked Russians from accessing Bulgarian digital currency exchange BTC-e.
Russian regulators and central bank officials have been battling over virtual currency legislation for several years now. More recently, Russia’s deputy minister of finance Alexei Moiseyev told TASS news agency that a direct ban on bitcoin would not be the right move, adding that consultations with experts will be held to determine the right course of action.
Moiseyev’s comments were interpreted by many in the Bitcoin community as a sign that authorities in Russia were warming up to the technology. However, the abrupt Roskomnadzor ban on LocalBitcoins casts a big shadow over the future of the digital currency industry in the Russian Federation.