Russian state corporation Rostec slashes blockchain spending

Russian state tech company Rostec is halving its spending on blockchain, according to local media.

The state-backed firm was planning to invest 55 billion ($877.8 million) to 85 billion rubles ($1.3 billion) on the technology by 2024, reports Russian news outlet Kommersant.

Now the industrial giant has announced it will instead spend a total of 28.4 billion rubles ($453.2 million), with much of the cash going towards combating counterfeit medicine.

Rostec’s decision is down to wider concerns in the Russian economy. Instead of blockchain, the firm is choosing “less risky” investments.

Mikhail Zhuzhzhalov, a lawyer at Deloitte Legal, told Kommersant that feelings of “general euphoria” around blockchain have cooled as it becomes clearer the technology is imperfect and requires further development.

Last month, it was reported criminals in Russia will no longer be able to hide their assets through cryptocurrency.

The Russian Ministry of Internal Affairs (MIA) confirmed it is pushing ahead with new legal frameworks to allow the seizure of cryptocurrency assets.

Following rumours in November that Russian authorities were drafting plans to allow law enforcement agencies to confiscate digital assets, several government ministries have now formalised their strategy.

According to local news outlet TASS, Russian authorities have now confirmed that digital assets may no longer be safe from seizure by authorities, citing crypto’s growing role in Russian cybercrime cases.