The Belarusian government is intensifying its efforts to combat the rising tide of cybercrime in the country by proposing new legislation banning peer-to-peer (P2P) transactions involving cryptocurrencies like Bitcoin. In an official announcement on July 2, the Ministry of Foreign Affairs (MFA) of the Republic of Belarus revealed its plans to address the alarming rate of cybercriminal activity.
Increased cyber crime rate in Belarus
Belarus has experienced a significant surge in cybercrime, prompting the authorities to take swift action. Since the beginning of the year, local prosecutors have cracked down on 27 individuals offering “illegal crypto exchange services,” confiscating nearly 22 million Belarusian rubles ($8.7 million) in illicit earnings. The MFA attributes this rise in criminal activity to the popularity of P2P cryptocurrency services among fraudsters who seek to convert and cash out stolen funds and facilitate transactions within criminal networks.
To counter these illicit activities effectively, the MFA is proposing a ban on P2P transactions in cryptocurrencies for individuals to allow only registered exchanges operating under the Belarus Hi-Tech Park (HTP) to facilitate cryptocurrency exchanges. The proposed legislation also aims to implement measures similar to those used in exchanging foreign currencies, making it extremely challenging for criminals to withdraw money acquired through illegal means. By enacting these regulations, the MFA hopes to deter information technology fraudsters from operating within Belarus.
However, this move represents a significant shift in Belarus’s stance on cryptocurrencies. In 2022, President Alexander Lukashenko signed a decree endorsing the free circulation of cryptocurrencies, including Bitcoin, within the country. This decision aimed to foster the growth of the crypto landscape and attract businesses to the Belarus Hi-Tech Park (HTP), which offers tax exemptions and a unique legal framework to support the creation and utilization of cryptocurrencies and tokens.
The proposal to ban P2P cryptocurrency transactions has generated skepticism among cryptocurrency enthusiasts and experts. Many question the practicality and enforceability of such a ban, highlighting the decentralized nature of cryptocurrencies and the difficulty in regulating P2P exchanges. Similar bans in countries like China have demonstrated limited success in eradicating P2P channels for crypto trading.
As Belarus takes a firm stance against cybercrime, the proposed ban on P2P cryptocurrency transactions demonstrates the government’s commitment to addressing the growing threat. By channeling all cryptocurrency exchanges through registered HTP exchanges, the authorities aim to enhance transparency, control, and oversight over financial transactions, making it significantly harder for criminals to cash out and launder illegally obtained funds.