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How to Buy Ethereum in Russia?

Bob Mason

Ethereum was launched back in 2015 and, while classified as a cryptocurrency, was not created to co-exist alongside Bitcoin, Bitcoin Cash, and Litecoin in order to compete against fiat money. Ethereum is best known for its smart contract capability.

A smart contract is where contracts are written in code and then uploaded onto Ethereum’s blockchain, making them free from manipulation. The advantage of smart contracts is that it removes the need for lawyers and other middlemen, eliminating time waiting times and hefty fees associated with the use of lawyers.

With the growth of the Initial Coin Offering market, Ethereum’s blockchain technology has also made it the cryptocurrency of choice for companies and projects raising funds through the ICO market, with ICOs requiring investors to exchange Ethereum with the ICO token in question.

Ethereum is the second largest cryptocurrency by market capitalization, with a market capitalization of $71.81bn at the time of the article.

How to Trade Ethereum in 3 Steps?

Trading cryptocurrencies have become incredibly popular, with the volatility seen across the cryptomarket drawing in both seasoned traders and those looking to try something new in the interest of making a few extra dollars each day.

Trading Ethereum is one of the more popular trades, with Ethereum’s ranking as one of the top cryptocurrencies providing some comfort to investors that it will still be in existence tomorrow.

Crypto exchanges provide platforms for traders to either trade the cryptocurrency itself or to trade an alternative instrument called Contract for Difference (“CFD”), which is an instrument that tracks Ethereum’s movements, without actually owning Ethereum.

When trading with CFDs, it’s a far simpler process, with the only major step being to open a trading account with a reputable broker, without the need to create wallets and so on. It is worth noting, however, that holding Ethereum CFDs means that you are not able to make purchases or transfer to other parties and is simply an instrument to give you exposure to the volatility and not Ethereum itself and its attributes as a cryptocurrency.

Exchanges in Russia offer both, the trading of Ethereum coins and also the trading of Ethereum CFDs, with one of the most well-known being Libertex, which provides a platform for the buying and selling of cryptocurrencies with traditional fiat money and additionally offers the trading cryptocurrency pairings ETH/BTC; BCH/BTC and LTC/BTC.

Ethereum can be bought on Libertex in 3 easy steps:

Step 1 – Open an Account

Opening an account couldn’t be simpler, simply sign in with an email address and password on Libertex’s website.

Libertex Ethereum 1

Step 2 – Fund Your Account

Once you have signed up, you will be prompted to fund your account, with your account number and balance shown on the right-hand side of the page.

Click the ‘Fund your account’ button. It’s worth noting that Libertex has a bonus offer at present, with new account openers being offered 100% of the first amount funded as an incentive (current bonus is for Russia and CIS countries only).

Step 3 – Buy and Sell Ethereum

Once you have funded the account, you can now select, ‘cryptocurrencies’ under instruments found towards the top of the page and then select ‘Ethereum’ on the left-hand side of the page then click on the ‘Open trade position’ button located above the chart on the right-hand side.

Libertex ethereum 2

You can then enter an amount of money that you would like to invest and also the size of the investment, for those looking to take advantage of the multiple functions that Libertex offers.

It’s worth noting that Libertex also provides a profit and loss limit functionality, where you can define your maximum profit and maximum loss. It’s particularly relevant when trading multiples, where a total loss could exceed actual funded investment size, providing the option for a trader to limit losses to the funded amount of the trade or less.

Buying and Selling Ethereum in Russia via Exchanges

While the Russian Ministry of Finance, Russia’s central bank and the Bank of Russia have been at odds over the cryptocurrency market and what should and shouldn’t be permitted, the trading of cryptocurrencies on exchanges has not been banned and is likely to be legalized in July of this year.

As the cryptomarket evolves, different governments and central banks are taking different positions on the purchase, ownership and use of cryptocurrencies. There’s been plenty of news recently of banks around the world banning the purchasing of cryptocurrencies with bank Credit Cards. The Russian government’s plans are to ban the use of cryptocurrencies in place of fiat money and, as things stand, support continues to exist for crypto exchanges and the trading of cryptocurrencies.

The support from the Ministry of Finance and the anticipated passing of the Digital Assets Regulation Bill has led to a number of exchanges providing platforms in Russia for cryptocurrency trading.

Two of the more popular exchanges supporting the buying and selling of cryptocurrencies, including Ethereum, are Binance and CEX.IO.

To purchase Ethereum on CEX.IO, follow the steps below:

Step 1 – Download and Open a Digital Wallet

Digital wallets are needed to hold purchased cryptocurrencies and are also needed to be able to send and receive cryptocurrencies in a safe and secure environment.

There are a vast number of wallets to choose from, including cold and hot wallets, a hot wallet being one that is connected to the internet, allowing the transfer of coins between wallets, while cold wallets are used for those looking to hold coins for a longer period of time.

In the case of buying Ethereum, in addition to security considerations, compatibility with the Ethereum blockchain is particularly important and so, we recommend that the digital wallet chosen is one that is also recommended by the Ethereum team.

There are various types of wallets that can hold Ethereum. For the Ethereum official wallet click here.

Ethereum Hardware wallets are the most secure way of storing Ether. The main ones are Ledger and TREZOR.

There are free software wallets but are less secure because they are often connected to the internet and can, therefore, be hacked. The main ones are Exodus, Jaxx, and MyEtherWallet.

Step 2 – Register and Open an Account

Go to the CEX.IO website, register and open an account. It is always recommended that Two-Factor Authentication (“2FA”) is selected in the account opening process, ensuring greater security measures to protect funds within your account.

CEX.io

Step 3 – Receive the 2FA Code

As mentioned above, we strongly recommend enabling the 2FA functionality to ensure a more secure account. In order to receive the 2FA Code, you will be prompted to select how you would like to receive the code, once you select the option to buy Ethereum.

Complete the necessary fields. In the case of receiving the 2FA Code by SMS or Phone Call, select the country and enter your mobile phone number.

Select preferred method of receipt and upon receipt, enter the 2FA Code.

Step 4 – Purchase Ethereum

Once entered, you can purchase your Ethereum coins. For those looking for smaller funded investment sizes, it is possible to buy a fraction of an Ethereum coin rather than having to buy a single coin at a far higher amount. As shown below, you can select your investment size as opposed to the number of coins.

CEXIO 2

Once this final step has been completed, you own Ethereum coin, next step will be to transfer the coins to your digital wallet.

Ethereum Exchanges in Russia

Selecting the right exchange is particularly important when looking to purchase and sell Ethereum in a safe and secure environment. Crypto exchanges continue to be victims of hackers, which does leave traders exposed to the risk of loss of coins.

Key considerations in the selection of an appropriate exchange would be transaction fees, speed and security.

There are numerous exchanges that facilitate the trading of Ethereum, with Russian regulations currently allowing for traders to also buy and sell overseas.

Some of the more well-known exchanges include, but are not limited to:

Libertex: Although it is not an exchange, the broker provides Ethereum contract for differences (CFD’s) with the option to leverage your position. Liberetx has a user-friendly platform and compared to the complications of cryptocurrencies exchanges, the broker allows you to open an account and trade cryptos through a simple process.

Coinmama: Coinmama doesn’t offer RUB/ETH pairings, but allows buying and selling of Ethereum from Russia, with buyers and sellers subject to domestic regulations. Customers can buy with debit or credit card, with a 6% transaction fee. Coinmama is one of the largest cryptocurrency exchanges and provides sizeable limits, with the only downside being the high transaction fee for debit and credit card purchases.

CEX.IO: Allows the purchase of cryptocurrencies by credit card with fees as low as 5.25%, when purchasing with Russian Rubles, whilst purchases with bank transfers are free of fees. The low credit card transaction fees make CEX.IO one of the most popular exchanges for credit card purchases of cryptocurrencies. The exchange also requires very little information for its first tier verification, which cap daily purchases to $400 per day and up to $2,000 per month, with credit card purchases instantaneous. While upgrading accounts result in lengthier verification processes, subsequent purchasing times improve.

Exmo: Considered to be a well-respected exchange, with a strong global presence, offering the RUB/ETH pairing. The platform is considered to be very user-friendly, with Exmo executing deposits and withdrawals instantly. In addition, security levels are considered appropriate, with commissions considered to be amongst the lowest in the market.

Ethereum and ICO in Russia

While some governments have been looking to clamp down on cryptocurrency trading, the Russian government is looking to legalize cryptocurrency trading, with the Russian Ministry of Finance, has drafted a Digital Assets Regulation Bill at the turn of the year. The Bill is designed to provide a regulatory framework for cryptocurrencies, ICOs, mining, and trading, with the government looking to protect non-licensed investors, by capping Initial Coin Offering investments to 500,000 Rubles, equivalent to US$9,000.

The amount was increased from an initial drafted 50,000 Ruble cap. The Bill is scheduled for July of this year, with the outcome likely to have a material impact on cryptocurrency holders, the cryptomarket, and the ICO market.

It’s also worth noting that the Russian government is in the process of also passing a law to ban the use of cryptocurrencies in place of fiat money, the intention being to provide the Russian Ruble with some protection.

While the ban on the use as an alternative to fiat money will likely remain, there are also amendments to the Bill to allow Russian investors to open accounts in overseas exchanges and to invest in non-domestic ICOs.

In the interest of opening the Russian ICO market, foreign investors are to also be permitted to invest in Russian initial coin offerings.

Plenty of debate remains however and the final version of the Bill may be vastly different to its current content and may fail to accommodate the desire of some government officials to free the market of any major regulations that could stifle the entrepreneurship seen in the ICO offerings today.

You only need to consider the Telegram ICO, which amassed a whopping $850m during its pre-sale this year, with the team planning to raise a total $2bn.

Ethereum is considered to be the most popular blockchain for token sales, with companies and projects raising funds through the ICO platform tending to only accept Ethereum coins in exchange for the tokens on offer.

Conclusion

The high degree of uncertainty and the continued shift in government attitudes towards the cryptocurrency market and initial coin offering market has limited the number of crypto exchanges establishing themselves domestically in Russia.

Even at the start of the year, there was disagreement between Ministry of Finance and the Bank of Russia on the legalization of cryptocurrency trading and until the Digital Assets Regulation Bill is passed in the summer, there are no guarantees.

Legalization would certainly open the market and lead to an increased number of exchanges, while there will likely be some restrictions that could control capital outflows, as the Russian government continues to be concerned over possible weakness in the Ruble. How the government will be able to monitor the boundary less digital world remains to be seen.

For now, there’s certainly interest in the cryptomarkets, with even the Russian government looking to explore the possibilities of launching its own cryptocurrency, in spite of Putin’s negative views on cryptocurrencies.

This article was originally posted on FX Empire

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