Russian encryption industry executive: Despite weak regulation, the Russian encryption market is still worth $500 billion

Russia's cryptocurrency market has grown to hundreds of billions of dollars despite a lack of adequate cryptocurrency regulation, according to a leading industry executive.

On October 27, Sergei Khitrov, founder of Russian cryptocurrency event Blockchain Life, delivered a keynote speech on the current state of cryptocurrency regulation in Russia at the 7th Blockchain Life Forum in Moscow.

Based on his insight into the industry and knowledge of the market, Khitrov estimates that the Russian cryptocurrency market is worth up to 40 trillion rubles (over $550 billion). He also claimed that the Russian crypto industry could generate tax revenues worth up to 284 billion rubles ($4 billion) per year if the Russian government provided the industry with more appropriate regulations.

Khitrov told Cointelegraph that as Russian regulators have continued to ignore the interests of the industry over the past few years, local crypto businesses have had to continue operating illegally or flee to other jurisdictions in order to survive.

“Without regulations that take into account the interests of the crypto community, crypto services cannot be provided legally. It is not profitable for businesses to step out of the shadows,” he said.

According to Khitrov, despite the size of the market, no local cryptocurrency exchange is officially operating in Russia:

“We know of many cryptocurrency exchanges that are rooted in Russia, but unfortunately, these exchanges are either not officially registered or are established in other jurisdictions.”

The executive said that he has been working on negotiating with various government departments on encryption legislation, and that regulators are well aware of local encryption personalities and businesses fleeing to other jurisdictions. According to Khitrov, the Russian government has been looking for ways to bring large crypto players home, but has failed to meet the industry’s needs.

He also emphasized that, so far, the Russian crypto community has “completely failed” in understanding how to pay crypto taxes.

Founded in 2017, the Blockchain Life Forum is Russia's leading cryptocurrency event and is held twice a year. The latest Blockchain Life forum, held in Moscow on October 26 and 27, brought together more than 5,000 attendees and speakers, including industry representatives and state officials such as Russia’s Internet Ombudsman Dmitry Marinichev and Alexey Minaev from the Ministry of Economic Development.

Executives from major global crypto exchanges such as Huobi and Exmo, as well as local crypto entrepreneurs also participated in the forum. The event also organized an NFT auction via Binance NFT, a non-NFT platform and marketplace operated by Binance, the world’s largest cryptocurrency exchange.

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