The Ministry of Foreign Affairs in Belarus is laboring towards legal amendments to halt peer-to-peer (P2P) transactions in cryptocurrencies such as Bitcoin. On July 2, the Ministry communicated its plans for new legislation that will outlaw P2P cryptocurrency exchanges for individuals. This information was revealed through an official announcement on Telegram’s popular messaging app.
Cybercrime Concerns Spur Action Against P2P Transfers
In Belarus, a soaring rate of cybercrime has sparked grave concern. The Ministry highlighted that since the beginning of 2023, local law enforcement agencies have thwarted the operations of 27 individuals engaging in the “provision of illegal crypto exchange services”.
Their combined unlawful earnings have been calculated at approximately 22 million Belarusian rubles ($8.7 million).
P2P crypto services have drawn the Ministry’s criticism for being the favored conduit for fraudsters to liquidate and convert ill-gotten gains. They also use it to transfer funds to parties involved in unlawful schemes.
Countering Illicit Activities: A Stricter Regulatory Approach
The Ministry has indicated its intent to forbid individuals from participating in P2P transactions to clamp down on such nefarious activities. Instead, citizens will be permitted to exchange crypto solely via exchanges registered with Belarus’ Hi-Tech Park (HTP). The regulator stated:
“The MFA is pioneering legislative innovations that prohibit crypto exchange transactions between individuals. In the interest of transparency and control, such financial transactions will be permitted only via HTP exchanges.”
Drawing parallels with the procedure for exchanging foreign currencies, the authority noted its plans to implement similar practices. These changes aim to make it “impossible to withdraw money derived from illegal activities.”
The Ministry added, “Under these conditions, it will no longer be profitable for IT fraudsters to operate within Belarus.”
The Ministry’s announcement, however, was met with skepticism among cryptocurrency enthusiasts. Many questioned the government’s capacity to enforce such a ban effectively on P2P cryptocurrency trading. One commentator on Twitter was heard to remark, “Good luck enforcing it.”
P2P Exchanges: The Backbone of Bitcoin
The concept of P2P exchange is deeply embedded in the DNA of Bitcoin, as outlined by its anonymous creator, Satoshi Nakamoto, in the original whitepaper. Samson Mow, the CEO of Jan3, a known advocate for Bitcoin, asserted that enforcing a P2P ban is a daunting, if not impossible task.
Mow revealed in June that despite the all-out ban on crypto transactions in China in 2021, many users continue to exchange their crypto through P2P channels.
Interestingly, this recent news from Belarus contradicts the legislative path the country has taken in the recent past. In 2022, the Belarusian President, Alexander Lukashenko, signed a decree affirming the country’s formal endorsement of the free circulation of cryptocurrencies like Bitcoin. It creates a sense of ambivalence about the future of cryptocurrency in Belarus.
The post Belarus Targets Cryptocurrency: A Deep Dive into the Ban on P2P Transactions appeared first on CryptoMode.
