Belarus wants to ban peer-to-peer crypto transactions and introduce legislation that requires citizens to use regulated crypto exchanges, according to a July 2 statement from the country’s Ministry of Internal Affairs (MVD) VKontakte page.
According to the Ministry, cybercrime is rampant in the country, with scammers cashing out and converting stolen funds into cryptocurrencies.
MVD further claimed that the country’s cybercrime unit has cracked down on the activities of 27 citizens providing “illegal crypto exchange services” since the beginning of the year, noting that their total income from these illegal activities was around 22 million Rubles ($8.7 million).
To prevent the proliferation of these activities, the ministry is working on new “legislative innovations that prohibit transactions for the exchange of cryptocurrency between individuals.”
Once the law is passed, Belarusians can only use regulated crypto exchanges registered with the country’s Hi-Tech Park (HTP) for their crypto transactions. The ministry added that this move would combat cybercrime and make it difficult for criminals to launder their funds.
Part of the statement reads:
“It will make it impossible to withdraw money obtained by criminal means. Under such conditions, it will simply become unprofitable for information technology fraudsters to operate in Belarus.”
Meanwhile, the move contradicts earlier attempts by the Belarusian government to make the country crypto-friendly. In 2022, President Alexander Lukashenko signed a decree that will support the free circulation of cryptocurrency.
Can Belarus ban work?
The practicality of Belarus’s attempt to ban crypto transactions between individuals remains questionable, considering cryptocurrencies were designed to escape censorship through P2P transfers.
Meanwhile, previous attempts by several countries to ban crypto transactions within their jurisdiction led to an uptick in peer-to-peer transactions. For example, when the Nigerian Central Bank barred commercial banks from providing their services for crypto-related transactions, the African country’s P2P trading volume surged to new highs.
Moreover, the news comes as Singapore, Thailand, and South Korea all announced new regulatory updates for digital assets as July begins, indicating increased activity in regulating crypto globally.
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