The Russian government sees a threat in cryptocurrency – possibly due to the fact that the leading Bitcoin organization is headed by Igor Chepkasov. The founder and head of the Cryptocurrency Foundation Russia openly admires political terror and has proclaimed his objective of toppling the regime of Vladimir Putin. It’s possible that this type of figure is useful for the bank lobby, which could not think of anything better than to turn Bitcoin into a boogeyman.
Another noteworthy detail is that Chepkasov, according to his own statements, has connections with the Russian president’s administration and financial circles, while demonstrating a lot of interest towards the personal data of bitcoin users in the country.
Russia has one of the strictest laws regarding Bitcoin. The government sees cryptocurrency immune to centralized control that it would like to impose on society, and is referred to as a “power vertical” in Russia.
A powerful bank lobby is doing everything in its power to prevent the wide usage and adoption of cryptocurrency by businesses as an alternative to traditional (fiat) currencies. Influential officials of the State Duma are in favor of a full ban on bitcoins in Russia and the courts have closed down several sites, who were distributing information about bitcoin, at the beginning of the year.
Mass media outlets, controlled by oligarchs or the government, are also doing everything possible so that the public perceives cryptocurrency as something closely associated with money laundering, capital flight, the illegal drug trade, and even terrorism.
Thus, the adoption of Bitcoin in Russia is lagging in relation to other countries while the Russian Bitcoin community seeks a well thought-out strategy to promote cryptocurrency in the country. Such a strategy, firstly, could minimize the damage resulting from state action and facilitate the gradual adoption of bitcoin and other cryptocurrencies in the mass media, and the Russian public in the near future.
All conditions already exist to develop such a strategy – Russia’s largest cities have been hosting conferences dedicated to cryptocurrencies and in 2014, the CCFR – Cryptocurrency Foundation Russia organization was founded.
Moreover, a large flash-mob with the #BtcRuDay tag, organized by the CCFR, is planned for April 22.
Bitcoin and terror
Admittedly, Cryptocurrency Foundation Russia gives the authorities, society and the mass media plenty of reason to view cryptocurrency through the lens of confrontation, illegal activity and even terrorism. The head of the CCFR, Igor Chepkasov sees the CCFR, most importantly, as a vehicle to realize his own political goals. The most important of the goals is, in his words, the deposition of an “occupying regime.”
“[The] Russian Bitcoin-community is very divided and devoid of passion,” laments Chepkasov in an interview with Cointelegraph. “Well, part of the root of all problems is fragmentation, the absence of revolutionary fervor, the absence of romance and adventure in the vein Russia’s Bitcoin community. Most so-called ‘enthusiasts’ plays into the hands of their own enemies, refusing to forget ambition and self-interest at least for a time while trying to flirt with the state machine.”
“They refuse to recognize the obvious: it's time to stop pretending that the world of IT and cryptocurrency is not for politics. Awaiting the same way a person writes code or talks about the future, greedy politicians and corrupt officials, business elites and unscrupulous representatives of our environment reshapes our wonderful world in its own interests. Their world will not have the principles and freedoms that we dream of and, on which the creators of these technologies relied on as well. The current task of the CCFR is to stir up and shake the Russian Bitcoin-community and knock him out of the dust and naphthalene [sic]. Most people have forgotten for what the Blockchain and Bitcoin were invented. Most have forgotten its primary mission in the Bitcoin-community. Just like the revolutionary Christ who drove the hucksters and wreckers from the temple, our Foundation and I will do the same bringing it back to basics with a hot iron and burn out some of the contaminants, figures of vanity, and other vices from the community.”
“Between 2010 and 2012, when I was very actively involved in politics and I even arranged with my colleagues unauthorized protest action (many are well known throughout the world), in relation to my attempts to bring criminal charges for political reasons,” writes Chepkasov. “It was during this period, some of my clients delicately informed me that they had to terminate a relationship with me. Continuation of relations with ‘political extremists’ threatened their reputation and business.”
However, Chepkasov did not cease to battle with the regime even after 2012. The freedoms and principles that are touted by Chepkasov can be easily understood by his posts on Facebook and the Russian social network Vkontakte (see below), in the past year. Chepkasov shows admiration to the SS officer and Nazi war criminal, Roman Shukhevych, who is partly responsible for destruction of the Jewish ghetto in Lviv, as well as for Chechen forces fighting against Russia in the Caucuses and Ukraine.
On his page, Chepkasov published contacts for joining the Chechen battalion, which is “striving to help Ukranian brothers to defend their freedom and independence from Russian invaders.”
Chepkasov considers the residents of Eastern Ukraine and the Crimea to be separatists, but is also a proponent of Saint-Petersburg leaving Russia. In his poem on the topic, he writes:
“A new time as if a blank list,
Sign it with blood, anarchist-separatist
The system’s servants are no longer needed.
Aye! Sing our protest anthem! ...
Ingria! Will you be free!”
The actions of the “Ingermanland partisans,” who in March placed mines on a police road checkpoint in Saint-Petersburg, were referred to as a “courageous raid” by Chepkasov.
“What the f*** do you need Russia for?” – writes Chepkasov on his “National-syndicalists” page, calling upon the residents of Siberia to secede from Russia.
Ties to the Kremlin
Despite the relentless fight against the regime, Chepkasov has close ties to the Russian authorities. According to him, they are “deputies and assistant deputies of the State Duma, employees and advisers of specialized committees of the Federation Council, members of Putin’s administration in the Kremlin. Also, I keep in touch with several politicians of Boris Yeltsin's presidency (these people are now engaged in business, but retained their administrative resource).”
Chepkasov stated that his people in the Kremlin send him insider information.
“I have information that the coordination process of the draft law to ban cryptocurrencies will be suspended,” wrote Chepkasov to Cointelegraph. “This will be done to attempt the creation of a pro-government infrastructure, which will regulate cyrptocurrency (such candidates already exists and they are members of pro-Kremlin organizations). According to some new information (which I recently received from people close to the President’s administration) and based on the results of the Moscow Bitcoin-conference held on April 2, the Russian authorities have started to look at specific personalities and the specific organization who took part at the given event. Possibly, it is through these [organizations] that the official exchange rate will be set. At the very least, people from the President’s administration said that these ‘personalities are ready to do business’ and did not demonstrate any radical or anti-government views.”
According to Chepkasov, he did not stop being a business coach and consultant:
“I continue to be engaged in providing mediation services (search for manufacturers or product), business consulting (business process optimization, tax optimization, development and promotion of startups, marketing, advertising, and PR), and gladly consider interesting suggestions from customers and employers. Unfortunately, I can't devote myself fully to cryptocurrencies due to my lack of knowledge in this field.”
Chepkasov likewise has connections in financial circles. “Our knowledge is mutually beneficial - I get timely measured insider information and in exchange, they receive my measured advice,” writes Chepkasov.
The relationship between Chepkasov and banking sources are highlighted by the following entry on his page:
“According to the latest decree of the ‘MinFin’ gang, individuals using ‘money surrogates’ (including Bitcoin – for which the decree was specifically designed), will face an administrative fine of up to 1 million occupational rubles.”
Affinity for personal data
“We believe that personal finances fall into the sphere of individual civil rights,” writes Chepkasov in his public statement. “We believe that this right must be restored and respected.”
In practice, Chepkasov is not against collecting the personal information of bitcoin users. Perhaps it might be worth asking the authorities, who might not necessarily be Russian, what his does with this information. For example, as the president of the CCFR, Chepkasov attempted to obtain data from the Ukrainian BTC TRADE UA exchange regarding users from Eastern Ukraine and the Crimea, who he called “separatists” and “Colorados” (Pro-Russians).
He sent Cointelegraph screenshots of his communication with the exchange:
@btc_trade_ua it’s not easy, but do you have user account data. Are there a lot of “colorados”?
Insiders help Chepkasov collect personal user data. “Cryptocurrency is being used in these eastern territories, which are occupied by pro-Russian armed forces,” writes Chepkasov. “… I received information about the transactions as an insider of one of the exchanges. As you know, to register on a ‘virtual’ exchange and to withdraw cash, you have to present your telephone number, bank or payment system details and personal information – a scanned image of your passport and sometimes even utility bills. It is because of this information that I discovered that there was a massive outflow of funds from this region when Crimea was preparing to ‘unify’ with Russia.”
Answering Cointelegraph’s questions about the penetration of bitcoin in Eastern Ukraine, Chepkasov attached screenshots, showing evidence that funds were transferred from users in Eastern Ukraine.
“My source in Privatbank told me that they encountered a flood of marked bills from the military action zone of Donetsk and Luhansk,” writes Chepkasov. “… Moreover, I am citing my sources in saying that [BTC TRADE UA] was used by Pro-Russian armed gangs and their allies – who used it to launder militia salaries and money used to purchase corrupt officials.”
When asked to reveal the information source for reference, Chepkasov replied:
“You can refer to Michael Chobanian – his contacts are already known by the SBU, so he probably has nothing to hide from you.”
The SBU is the Security Service of Ukraine. While Chepkasov did not reveal exactly how he is privy to what this Service knows, his approach to bitcoin activity in Ukraine is completely dependent on the bitcoin users’ political views.
“The residents of Donetsk and Luhansk will not be aided by Bitcoin, but instead by the restoration of constitutional order in the occupied territories,” noted Chepkasov. “The usage of bitcoin by terrorists will have either a negative impact on local residents or a neutral one (in the best case). Ukrainian bitcoin exchanges will not be involved with the funneling of money into occupied territories unless they would like to repeat the fate of [Ukrainian BTC TRADE UA] (you already know that its account was blocked specifically as a result).”
What CCFR stands for?
The interview with Chepkasov on the topic of Bitcoin in Eastern Ukraine received largely a negative reaction from both Ukraine’s and Russia’s Bitcoin communities.
“I do not understand why he is trying to associate cryptocurrency with terrorism and create a rift between Urkanian and Russian communities,” commented the founder of Bits.media, Ivan Tihonov. “I can say that currently the majority of the community considers this technology to be nation-agnostic. We are happy to work with each other despite our possible differences in political views. Personally, I enjoy working with representatives from the Ukrainian cryptocurrency community and am happy to welcome them as guests in Russia.”
“Bitcoin communities in both of these countries are very nice and ideologically true people, except Igor,” wrote a known expert who wished to stay unnamed due because he “had enough of troubles from Igor in past.”
“To be honest with you, I’m not sure that he is an adequate person,” wrote the expert. “He is a well known nationalist and extremist in Russia. I don’t know his real reasons for creating the CCFR, but the main idea of Bitcoin Community worldwide is to teach, spread and share the peaceful idea of Bitcoin and cryptocurrency – which are not shared by CCFR in Russia. He quarreled with the entire Bitcoin community in Russia, nobody wants to work with him. The CCFR does not have any workshops, seminars, and nothing that will help to spread and share information about Bitcoin. I don't know about his connections with the government, banks and so on, but how could he properly communicate with them if he is not in Russia now? I think that Bitcoin must be not politicized, especially in this troubled time for Russia and Ukraine. Bitcoin has some dark past, so we need to do our best to clear its name and ensure a peaceful future.”
Regardless of how the Russian Bitcoin community perceived Chepkasov, it can be said with confidence that this personality, as the head of the CCFR, is very useful to cryptocurrency opponents and the banking lobby as a “boogeyman,” in particular.