Claims of $10 Billion Russian Bitcoin Purchase Hit the Rocks

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Crypto fans around the world woke to headlines Monday proclaiming that Russia was planning on buying up $10 billion worth of Bitcoin in order to circumvent US sanctions. Some will have spilled their cereal in excitement at the headline, some will have read the article with skepticism while others will have immediately dismissed it. Time will tell who will eventually be right, but it seems that the cereal spillers might have been getting ahead of themselves.

Ginko Sets out Russia’s Bitcoin Position (With No Authority)

According to the Daily Telegraph, Vladislav Ginko, an economist with the Russian Presidential Academy of National Economy and Public Administration and with “close ties to the Kremlin”, said that Russia is looking at ways to reduce the impact of US sanctions, of which Bitcoin was one. Investment in the cryptocurrency could, Ginko said, reach $10 billion. This suggestion is supported by Max Keiser who last week claimed that many nations will start to “de-dollarize” their economies, with Bitcoin being the preferred option. This sentiment seems to be supported by Vladimir Putin’s recent about turn in his opinion of cryptocurrencies, which includes trying to get a regulatory bill through parliament to allow Russian companies to work with Bitcoin and blockchain. Despite this, Ginko’s claims, and the evidence (or lack of it), suggest otherwise.

Announce, then Act?

In some ways, now is the perfect time for Russia to be buying up Bitcoin given that the coin is still in still in the grip of a bear market, but the article ignores the question of why Russia would announce such a plan in advance and risk the price jumping at the news. Surely any agency with an ounce of sense would buy it up cheap and then tell the world what they’ve done. In addition to this, the fact that the news “got out” at all is suspect – usually when a state wants to do something they don’t tell the world about it first, whatever it might be, but particularly when it involves circumventing international sanctions. Something so huge, were it true, certainly would not have been leaked in this way, especially in a country so paranoid about its intelligence as Russia.

Ginko a Trustworthy Source?

In addition to this, Ginko has a “trust rating” of just 3% according to a Russian website that ranks the trustworthiness of prominent individuals as voted for by citizens. Ginko himself quickly began retweeting the news reports that started to emerge regarding his statement, all of which adds to a tapestry put together by an anonymous Imgur user that shows how Ginko spun the story, citing himself as the source and spreading the news as far as possible.
Was Ginko just trying to make a name for himself? Was he ordered to put the message out as some kind of diversionary tactic? The real reasons may come clear within the next few days and weeks, but for now it seems that the story is as watertight as a set of Russian dolls.