The office of Russia’s Prosecutor General has warned companies and individuals against using Bitcoin, following a similar move by the country's Central Bank. Last week, the Central Bank declared that Bitcoin was not legal tender, but now Russia’s security agencies have taken the ban on the currency a step further. The FSB and Interior Ministry will now consider all Bitcoin transactions subject to investigation as part of efforts against money laundering and financing of terrorism. The FSB and the Interior Ministry say they will be on the lookout for companies that accept the virtual currency.

“Our monitoring of the situation with the so-called virtual currencies shows that there is growing interest in them, including from those who want to use them for money laundering," the Prosecutor General's Office said in a statement issued to the ITAR-TASS news agency. “The official Russian currency is the ruble. The use of any other monetary instruments or surrogates is forbidden. The anonymous payment systems and crypto-currencies, including Bitcoin - which is the most popular of them - are monetary surrogates. As such, their use by private citizens or legal entities is not allowed," the statement reads.

According to a source in the Prosecutor General’s office, Russian officials admit that merely banning citizens from investing their money into Bitcoins is not going to work. Instead, law-enforcement agencies “will step up efforts to identify the potential recipients of Bitcoins in Russia.”

“If we find that a company accepts Bitcoin payments, we can launch a criminal investigation against its managers under Article 174 of the Penal Code," the source said, according to news agency RBC. The article in question outlines penalties for money laundering.

Meanwhile, Russian government agencies are already working on new legislation that will specifically regulate virtual currencies.

Click to enlarge the infographics.

The story is based on reporting by RBC Daily and ITAR-TASS.