How Russian Hackers Related To OTC Trading And Who Benefits

According to experts’ forecasts, over-the-counter trading in the cryptocurrency market is the vast percentage of all the operations; and it actually forms a separate segment of the emerging digital economy. And suddenly, the country that is not considered a leader traditionally, has taken the lead – Russia.

 

In the recent study, conducted by the TABB Group found out, that the market of bitcoins, passing by exchanges, is exceeding the volume of the exchange trade by 2-3 times. In reality, it means that if we consider the sheer volume of the daily bitcoin trade at exchanges to be the starting point, which is $5 billion, then off-budget operations with bitcoins are $12 billion a day.

 

What is the reason for that? Actually, in the countries with developed cryptocurrency systems, like Malta and the USA, this happens among the “crypto whales.” That is like 1 percent of crypto owners. The list is relatively short: institutional investors, ICO organizers, and similar companies. They are making doing this because of business that they are such deals when one order can cause market fluctuation.

That is why they use so-called over-the-counter instruments when they sell them on principle, well described by the concept of P2P. In fact, it allows them to avoid losses because of the market fluctuation and the payment of duties.

 

Amid the countries with the developing economy, including Russia, the situation is different: the youth of the crypto industry can partly explain this. In fact, people would be happy to use the exchange, however, due to the absence of the exchange itself or of the ability to use exchange services to make deals in the cryptocurrency they have to perform transactions directly.

 

Most likely, this percentage will start to decrease rapidly with the growth of liberalization and the simplification of work with cryptocurrency assets. For example, with the advent of crypto credit cards (MasterCard has patented technology that can be used for this).

 

But that is the part of the problem, which can be called harmless. If we saturate ourselves in the subject of the over-the-counter trade, everything will start to get complicated in the geometric progression. And here another world begins – the world of the shadow economy. Its first and global problem is “rogue” countries. We have already written about Venezuela’s legislative initiatives with their EL Petro; Iran’s thinking about creating its national cryptocurrency; and North Korea’s games with currency assets. This problem is often either diligently sidestepped or not discussed at all. But the countries in the international isolation started to join the market actively, and it has caused the expected disapproval of the world “police officer” – the USA. As a result, SEC that pretty much regulates the whole crypto market has started to tighten the screws. Many traders are already displeased by the fact that many crypto services this days either require full identity check to meet all the principles of AML/KYC or entirely stopped working with the residents of other countries. To understand this topic better, we talked with the Deputy Chairman of the Subcommittee on Payment Instruments and Information Security of the Chamber of Commerce and Industry of Russian Federation Timur AITOV.

In the exclusive interview with Bitnewstoday.com, he confirmed that the market is experiencing the growth of the over-the-counter trading. However, everything is a bit more complicated.

 

“We must remember that at the moment the cryptocurrency in Russia is not a legal thing, but it's not banned either, which puts all the crypto organizations operating in the “grey area.” And because of this - it is wrong to call them Russian, since from a  legal point of view: they are the part of the international market. As for the growth of the over-the-counter trading, it is because many countries with strained relations in the international political arena are starting to join the crypto market to dodge limitations inflicted by international sanctions”.

 

According to Timur AITOV, there is another factor in the growth of the over-the-counter trading. In fact, we are talking about direct illegal activities: “Goods at the initially low prices are imported into the territory of the country. All the taxes and customs duties are calculated based on it. And the on-site payment is in the cryptocurrency already”. As a result, the country’s budget will not receive taxes (about 125 billion rubles per month) from actions like this,  which is makes it a serious crime.

 

Over-the-counter trading is yet another reason for a financial regulator to doubt more the potential security of crypto assets for the state. There is a persistent opinion about the fundamentally criminal nature of the cryptocurrency in the world. In recent years the crypto community has carefully and consistently debunked this stereotype. It is clear that no one is struggling with the crypt itself, but only with illegal ways of using it. But the position of digital money in the public mind is still very shaky, and a hard-earned reputation can be lost very quickly. At the same time, not only the crypto market itself but also the blockchain will be harmed because people do not always see the difference between these concepts.

 

According to the report of Gartner Company, implementation of the blockchain technology is running very carefully: only 23% of 3000 companies in 98 countries are planning or are “already doing something in the blockchain.” Over-the-counter trading can become a significant obstacle to the development of this revolutionary technology in the developing countries, where a cautious and cynical attitude to the cryptocurrency is widespread.

 

And the saddest thing is the following: it does not mean at all that all the trade in cryptocurrencies, passing outside of the exchanges, is a "dirty digital cash" digital currency. For many companies, it is just more convenient. In the world of fiat money, there is a similar situation with offshore accounts, often associated with the shelter of illegal incomes. And it's not at all the notorious "pesky r Russian Hackers," but various crypto funds and ICO, located anywhere in the world and using over-the-counter crypto trading tools.