Russia’s Administration for Telecom and Internet Roskomnadzor has blocked peer-to-peer local Bitcoin exchange LocalBitcoins. They have blacklisted the domain, and it is now inaccessible by Russian ISPs.

However, Nikolaus Kangas, CEO of LocalBitcoins, thinks that this ban is only temporary and stays optimistic about the future of his company in Russia and Bitcoin in general.  At the end of August, about 1.35 million users from 249 countries were registered at LocalBitcoins, where the weekly volume of transactions on the platform exceeded $14 million.

It is possible to work around the block

Roskomnadzor blocked the site for ISPs back in July 2016. For over 2 months, LocalBitcoins did not release any response to this until September 10 in a blog post with additional information in Russian on how to work around the block in three steps.

The blog post states:

“Recently, it has been decided by Roskomnadzor to block LocalBitcoins in Russia. For us, as well as for you, this decision came as a surprise. The instructions below will help you to continue to use our resources, despite LocalBitcoins being blocked.”

LocalBitcoins and user responses

LocalBitcoins has suggested users to use VPN or TOR in order to beat the blocking system and continue their trading. So far, Russia is showing no sign of repealing this website block. Even with the ban, loyal users are still working around the block and LocalBitcoins BTC/RUB volume has been on a weekly high according to CoinDance.

It is still too early to say how the LocalBitcoins trading volume will be affected by this block which they had never expected. Trade volumes should either be higher or lower than usual in the next few weeks.

Nikolaus Kangas spoke to Cointelegraph about this decision:

“This kind of incident is never positive, but we are optimistic that this is just temporary, since the legal status of Bitcoin in Russia is still not clear. We are also optimistic that Russia won't ban Bitcoin.”

Bitcoin and Russia

While Russia has eased its Bitcoin ban and said it is now a foreign currency, the lack of control is a problem. Presently, several Bitcoin exchanges including BTC-e and Bitstamp are also having trouble tapping into the Russian markets. This is due to Russia’s uneasy stance towards Bitcoin’s anonymous design which can be used for criminal activity as well as for fast transactions.

In the past, Russia even announced a total ban on Bitcoin but repealed the ban after realizing it meant stopping Blockchain technology in fintech. Unlike New York, Russia does not require a special license.