The Central Bank of Russia has officially requested Yandex, the largest Internet company in Russia, to disallow Alexei Navalny, a Russian lawyer and financial activist who is running a presidential campaign in 2018, from raising funds using the Yandex payment application.
Yandex N.V. operates the largest search engine and provides the most widely used financial service in Russia. It controls over 60 percent of the Internet market share and serves over 55 mln active users. Its financial application is used by the general Russian consumer base to process basic payments, from salaries to purchases at local stores and e-commerce platforms.
Navalny’s campaign welcomed by the cryptocurrency community
In mid-December of 2016, Navalny officially announced his presidential campaign through social media and his YouTube channel, which has nearly 330,000 subscribers. Over the past few years, Navalny maintained an active viewership on his YouTube channel and social media platforms, such as Twitter, due to his strong stance against current Russian President Vladimir Putin.
Along with the announcement, Navalny released a website called Navalny.com, on which he shared the specifics of his presidential campaign with his supporters and also to accept online donations.
At the time, Navalny’s campaign was welcomed by the cryptocurrency community for accepting Bitcoin donations. In a country with relatively low bank account and credit card penetration, it seemed like the most practical method for receiving donations from his supporters.
The government reacts with a ban
Within a month after the announcement of Navalny and his presidential campaign, the Central Bank of Russia ordered Yandex to block payments being sent to Navalny to fund his campaign.
The Financial Security Service of Russia, known as the FSB, confiscated the information of individuals who sent donations to Navalny and blocked 12,366 transactions. In a blog post entitled “Where the money is” posted on the official website of Navalny, he stated that most of the donations were blocked, with the exception of Bitcoin payments.
To date, Navalny and his team received nearly $22,500 worth of Bitcoin payments. That is, 24.7 Bitcoins sent within the past 30 days in 249 transactions.