In an attempt to counter cybercrime, Belarus is reportedly looking to outlaw person-to-person (P2P) cryptocurrency transactions, according to the country's Ministry of Internal Affairs. The ministry has indicated that this move is motivated by a high rate of cryptocurrency-related crime in the country.
The official announcement, which was made on July 2 via Telegram by the Ministry of Internal Affairs (MIA) of the Republic of Belarus, indicated that proposed legislative changes would lead to a blanket ban on individual P2P cryptocurrency exchanges.
The ministry cited a high incidence of cybercrime in the country as the rationale for the move, stating that local authorities had cracked down on 27 individuals who were offering "unlawful cryptocurrency exchange services" since the beginning of the year. These illicit activities reportedly yielded revenues of approximately 22 million Belarusian rubles ($8.7 million).
The ministry made it clear that P2P cryptocurrency services are a preferred method for fraudsters seeking to launder and convert stolen funds, or to transfer money to those involved in criminal activities. To mitigate this, the MIA plans to restrict individuals from participating in P2P transactions, permitting them to exchange cryptocurrencies only through exchanges that are registered with the Belarus Hi-Tech Park (HTP).
The ministry also intends to implement a procedure similar to the current system for exchanging foreign currencies, a move aimed at making it “impossible to withdraw money obtained from illicit activities.” “Under such conditions, it will simply become unprofitable for IT fraudsters to operate in Belarus,” the MIA said.
Many cryptocurrency advocates have raised doubts about the government's ability to enforce a ban on P2P cryptocurrency trading. One such observer commented on Twitter: “Good luck enforcing it.”
Critics also pointed out that the very concept of P2P exchange is fundamental to Bitcoin, as described by its anonymous creator, Satoshi Nakamoto. According to Bitcoin supporters such as Jan3 CEO Samson Mow, enforcing a ban on P2P is not an easy task, if not outright impossible. Mow stated in June that many users in China continue to use P2P channels for their crypto transactions despite the country's 2021 ban on all crypto transactions.
This latest development from Belarus appears to contradict the country's previously established legislation. In 2022, President Alexander Lukashenko signed a decree supporting the free circulation of cryptocurrencies like Bitcoin.