Putin is sounding the alarm over cryptocurrencies

Picture: Getty Images

Russian President Vladimir Putin is sounding the alarm over cryptocurrencies, signalling that the country may soon crack down on the exploding cryptomarket.

The Financial Times on Tuesday reported that Putin said cryptocurrencies like bitcoin posed “serious risks” and allowed for people to “launder criminally obtained money, evade taxes, and even finance terrorism as well as, of course, perpetuating fraudulent schemes that obviously may affect ordinary citizens.”

The market capitalisation for digital coins has exploded this year by more than 700% to $US150 billion. The growth of the cryptocurrency market has been fuelled in part by initial coin offerings, a red-hot cryptocurrency-based fundraising method.

Many countries, including China and South Korea, have cracked down on ICOs because of the threat they pose to retail investors.

Whereas China and South Korea deemed ICOs illegal, Putin appears to be suggesting more moderate regulations.

“We need to use the advantages that come with any technological solutions in banking,” he said, according to the FT’s report. “It’s important not to set up superfluous barriers, naturally, but to create the essential conditions for the further development and perfection of the national financial system.”

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