Like China, Russia's off site bitcoin trading is becoming more and more active.

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Apart from China and India, Russia is one of the few countries that restrict encryption transactions. The country's demand for investments in special currency and other encrypted currency assets in OTC (OTC) is increasing.

According to local media reports, in Moscow alone, the daily turnover of the main encrypted currencies, such as Bitcoin and Ether Fong, reached $50 million on peak days. That's a relatively small number compared with the main encrypted currency exchanges, but given the regulatory uncertainty in Russia, it's a big number.

At present, it is not illegal to invest in encrypted currencies according to local laws. Because encrypted money is considered property, it is technically legal for Russian citizens and residents to hold encrypted money as long as the money invested in the encrypted money market comes from a legitimate source.

Aleksei Karpenko, a senior partner at Forward Legal, a law firm, said in an interview: "There is a common rule that if a particular transaction is not prohibited, then they are allowed. This is the agreement between the buyer and the seller. "


Regulatory uncertainty

Nevertheless, because of the lack of regulatory framework and policies, the Russian encryption market is still stagnant. Although the residential investment market is legal, it is still uncertain whether companies will be allowed to operate encrypted trading platforms.

Previously, the Russian government drafted three pieces of legislation on the encryption of currency and currency-related business, to address the legitimacy of exchange operators and encrypted currency transactions. However, the approval of the three bills was delayed until the end of 2018, and there would be no regulated encrypted currency exchanges in the market until the government explicitly authorized companies to operate as encrypted currency exchanges.

Local over-the-counter trading platforms rely on global encrypted exchanges to inject liquidity into Russia's encrypted money market, charging a commission of 1.5 to 2 per cent. Despite about 20 active investors a day, they still generate hundreds of thousands of dollars in daily profits.


China has similar trends.

Traders in China and Russia are trying to circumvent local restrictions by trading OTC.

Unlike Russia, China strictly prohibits the transaction of encrypted currencies. Therefore, it is not lawful for local residents and citizens to purchase or hold encrypted currencies.

However, according to the Hongkong South China Morning Post, despite the recent efforts of the Chinese government to eliminate the link between Alipay and other financial technology platforms and mainland OTC trading platforms, the activities of China's encrypted currency trading market remain active.

China's financial authorities have made it difficult for Chinese investors to configure their holdings of Renminbi assets into digital assets. Through Hongkong's shell account, investors can still invest heavily in encrypted currencies.

Terence Tsang, chief executive of Hong Kong-based Digital Asset Exchange Tidebit, said: "The latest warning and potential increase in foreign surveillance is directed at a group of small exchanges claiming to be foreign entities that are actually operating in China and that they have outsourced their business to a Chinese company."

Even in China and elsewhere, as offshore markets serve investors in encrypted currencies, it is difficult for governments to ban bitcoins and other encrypted currencies altogether.

Analysts expect the activities of investors in encrypted currencies, such as India, China and Russia, to continue to grow over the next few years, regardless of policy conditions in the three countries.