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Belarus Tightens Cryptocurrency Regulations to Combat Cybercrime Significantly Affecting Pi Network 

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In a significant move to curb the rising tide of cybercrime and illegal financial activities, the Belarusian Ministry of Foreign Affairs has announced a new legislative measure aimed at controlling cryptocurrency transactions. Effective immediately, the new law prohibits peer-to-peer (P2P) transactions involving popular cryptocurrencies such as Bitcoin and the Pi Network’s Native Coin IOU. This announcement was made via an official post on Telegram on July 2.

The ministry’s decision comes in the wake of increasing cybercriminal activities within Belarus. Local authorities have intensified their crackdown on illegal cryptocurrency exchanges, leading to the arrest of 27 individuals since the start of 2023. These persons were reportedly involved in unauthorized crypto exchange services, amassing around 22 million Belarusian rubles ($8.7 million) through illicit operations.

The ministry pointed out that P2P crypto services are a preferred method for fraudsters, as they often use these platforms to launder and transfer stolen funds. This facilitates financial interactions among criminals and aids in funding their operations discreetly. To combat this, the new legislation will restrict individuals from engaging in P2P exchanges and instead direct them to use registered cryptocurrency exchanges located within the Belarus Hi-Tech Park (HTP).

An official from the ministry elaborated on the legislative changes, stating, “The MFA is implementing legislative innovations that prohibit crypto exchange transactions between individuals. To ensure transparency and control, only transactions conducted through HTP exchanges will be permissible.” This approach is designed to mirror traditional foreign currency exchange practices, with robust measures to prevent the withdrawal of funds derived from illegal activities.

This legislative move reflects a growing trend among governments worldwide to regulate the digital currency space more strictly as a way to prevent financial crimes and enhance economic security. By channeling crypto transactions through regulated exchanges, Belarus aims to provide a safer and more controlled environment for digital financial activities, aligning with global standards for financial operations and crime prevention.

The regulations introduced by the Belarusian Ministry of Foreign Affairs serve as a preemptive strike against the potential misuse of cryptocurrencies in financing illicit activities. The focus on P2P transactions is particularly crucial, given the anonymity and lack of oversight associated with these exchanges, which can facilitate everything from money laundering to financing terrorism.

The requirement to use only registered cryptocurrency exchanges within the Belarus Hi-Tech Park (HTP) adds a layer of security. The HTP, known for its advanced technological developments and as a hub for IT companies, will now play a pivotal role in monitoring and controlling cryptocurrency exchanges. These exchanges are expected to adhere to stringent regulations, implement advanced security protocols, and ensure compliance with anti-money laundering (AML) and combating the financing of terrorism (CFT) standards.

Further measures are expected to be introduced, including detailed reporting requirements for transactions and enhanced identity verification processes. These steps will help establish a more transparent financial environment and assist law enforcement in tracing any illicit activities more effectively.

The Belarusian government’s approach could serve as a model for other nations grappling with similar issues. However, it also raises concerns about privacy and the freedom of individuals to engage in legitimate digital transactions without government oversight. Critics argue that while the intent to curb illegal activities is commendable, excessive regulation could stifle innovation and deter legitimate users from adopting digital currencies.

As the legislation takes effect, its implementation and the public’s reaction will be closely watched. Success will likely depend on balancing security concerns with the promotion of technological advancements and financial freedom. This move by Belarus is a bold step into a complex and ever-evolving digital financial landscape, aiming to secure a safer economic environment while navigating the challenges of modern technology and privacy. Read More

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