The Russian central bank has reiterated its negative stance on the leading cryptocurrency, Bitcoin, with one of the bank’s top executives comparing the cryptocurrency with a pyramid scheme. In an interview, the first deputy governor at the Bank of Russia, Sergey Shvetsov, expressed the financial authority’s concerns over cryptocurrency investment, warning investors about the perceived risk of losses. Financial regulators worldwide are actively working on regulating cryptocurrencies.
Central bank’s executive says bitcoin is just one of many pyramid schemes.
Bank of Russia’s executive said that local investors have been increasingly pouring their money into alternative financial instruments that he referred to as “technological, financial pyramids,” stating that Bitcoin is just one of such pyramid schemes. He said that many retail investors expect huge returns from cryptocurrency investment, selling their real estate holdings, or taking loans in order to invest in Bitcoin despite the “huge” risk of losing all their money. When buying Bitcoin, a person enters a minefield, and there is no one to rely on besides himself, and no one can protect him,” the executive further argued.
“Russian government holds no responsibility for losses by cryptocurrency investors.”
Russian regulators have not been supportive of cryptocurrencies like many other regulators worldwide. Shvetsov said, “There is no need to walk where you are not protected by the Russian Federation, where your money would be simply taken away, and you will not be able to do anything about it.” The bank’s executive had previously made similar remarks about the cryptocurrency industry, stating last year that the Bank of Russia did not recognize crypto purchases as an investment and calling on the government and financial intermediaries to discourage Russians from buying cryptocurrencies.