A mixed crowd of denim jeans and custom-tailored suits, typical for crypto-events, is standing across the vertical aisle of the the main conference area at the Blockchain & Bitcoin Conference in Saint Petersburg, blocking the line of sight for those lucky enough to have snatched themselves a chair in the back. The hall, while spacious — high ceiling, tall arched windows partly covered with ASIC mining billboards — still isn’t quite large enough to fit all interested visitors.

The speaker on stage works for Alfa Bank, one of the biggest banks in Russia. The financial sector in the former Soviet block is taking as much interest in Bitcoin and, of course, blockchain technology as anywhere else is. Having skipped Russia’s second-biggest city for the past two years, Smile-Expo re-introduced its Eastern European conference tour in Saint Petersburg last Thursday.

“The event had over 600 visitors, 25 exhibitors and some 20 speakers. Four of those work for Russia’s largest financial institutions,” event organizer Pavol Likhomanov told Bitcoin Magazine. “Entrepreneurs and finance professionals are increasingly taking this technology seriously. This is evident from the turnup here in Saint Petersburg; and we’ve seen year-over-year growth in interest at our Moscow event as well.”

This interest is not necessarily self-evident. It was only in 2014 — indeed, around the time of the last Saint Petersburg conference — that Russia seemed to emerge as one of the most crypto-hostile nations on the globe. In an attempt to curb criminal activity, the Putin administration introduced draft legislation that would essentially ban any use of cryptocurrencies. Not much later, access to a number of Bitcoin websites, including bitcoin.org, was blocked in the country.

But so far, the proposed law has never actually been implemented.

“Bitcoin and cryptocurrencies still have no legal status in Russia,” Artem Tolkachev told Bitcoin Magazine. The director of Deloitte Russia’s legal services for technology projects was one of the headline speakers at the event, where the legal implications of blockchain technology represented a big chunk of the morning program.

“The central bank considers cryptocurrency like bitcoin a money surrogate, which is a progressive stance. But the Ministry of Finance is more conservative. They don’t like anything they don’t understand and cannot control,” he said. “And Russian policymakers are not always very open-minded. They prefer to have their own internet … their own currency.”

Needless to say, Bitcoin is not a great fit in such a worldview.

The Thaw

But the initial icy stance on digital currencies seems to be getting a bit less frosty these days.

It was only a couple of weeks ago that Russian president Vladimir Putin met Ethereum creator Vitalik Buterin at the International Economic Forum, also held in Saint Petersburg. In the widely reported event, within the crypto-sphere at least, the president was said to have “supported the idea of establishing ties with possible Russian partners” — referring to Buterin’s technology pitch.

The announcement has been interpreted as a sort of preliminary green light for Russian blockchain entrepreneurs and investors. While not quite an official endorsement from the Kremlin, let alone formal regulation, it’s been a hopeful sign nonetheless.

But until it’s official, Russian cryptocurrency users across the halls in the historic Vedensky Hotel, the site of last week’s event, remain reserved.

“The Russian market is volatile,” Timur, a former forex trader, told Bitcoin Magazine. He offers a platform that allows Russian brokers to trade on behalf of their clients, Russian cryptocurrency speculators. Speaking from his exhibit stand in Saint Petersburg, he explained: “We never know for sure if what’s accepted today will be legal tomorrow. Official policy could change at a whim.”

That’s why his company sets customers up with foreign bank accounts in Switzerland, or Lithuania, or maybe offshore. The coins themselves — bitcoin, litecoin, ether — never leave the exchange where they are traded.

And these exchanges are not in Russia either … at least not officially. Incorporating abroad is a typical strategy for Russians and their cryptocurrency startups.

Mining

It’s not just traders and the finance sector that are taking an interest. Bitcoin mining is growing in Russia too.

This is perhaps most evident from the rise of mining pool BitClub Network over the past months. While officially established outside of Russia, the team works from Kazan, a city to the east of Moscow. Already one of the biggest non-Chinese miners on the Bitcoin network, BitClub Network’s founder — he’s casually wearing a T-shirt emblazoned with an image of Putin — assured Bitcoin Magazine his will be a top-five pool by the end of the year. At least, that’s what one of his employees translated into English, his smartphone showing videos of data centers full of humming ASIC miners.

Russian miners are now setting up data centers such as these in the east of Russia, Alex of mining service provider MyRig told Bitcoin Magazine. “The temperature in Irkoetsk, for example, is ideal for Bitcoin mining: it can be -40 degrees Celsius. Meanwhile, electricity is cheap. There’s a big raw material industry, but with the crisis, some factories are out of use. With energy to spare, miners are starting to fill that void.”

MyRig, a rebranding of Bitmain Warranty (not to be confused with Bitmain), is not the only mining business at the Saint Petersburg conference. The company is vying for attention with several competitors in one of the exhibition rooms. One of them sells entire containers full of equipment, not unlike BitFury’s mobile data centers. Another is re-selling Antminers, the best-selling Bitmain machines.

“But to mine bitcoin in Russia at scale, you do still need to have the right connections,” Alex continues. “If you don’t know your way around local policymakers you risk being shut down.” Though with the increase in profits that the mining sector has seen over the past half year or so, the “big dicks” are entering the space, Alex said. “The guys with lots of money — and lots of connections. I’d expect mining in Russia to continue to grow significantly over the next year.”

And official regulation should be coming too, Deloitte’s Tolkachev said. A draft bill for cryptocurrency should be introduced within a few months, and could be approved by early 2018. This could bring some much-desired regulatory clarity for Russians wanting to open cryptocurrency-related businesses and otherwise openly engage in the industry without needing to work around the existing legal structure.

That is, visitors in the Vedensky Hotel generally seemed to agree, unless Putin changes his mind.