hit counter

Russia Will Improve Monitoring Of Crypto Transactions As Regulation Approaches

Russia’s financial watchdog wants to improve its systems and currently identify hidden transactions and blockchains

Russia’s financial watchdog wants to improve its systems and currently identify hidden transactions and blockchains

Russia’s financial watchdog Rosfinmonitoring said Friday it uses software to track cryptocurrency transactions and hopes to hone its skills as Moscow begins regulating what one lawmaker called “cryptomania.”

(Sign up for our technology newsletter, Today’s Cache, for insights into emerging issues at the intersection of technology, business, and government. Click here to sign up for free.)

The Bank of Russia has long expressed skepticism about cryptocurrencies, citing concerns about financial stability and advocating a total ban on trading and mining, at odds with a government keen to regulate the industry.

Russia has already identified specific criminal cases related to cryptocurrencies, said Yuri Chikhanchin, head of Rosfinmonitoring, adding that the agency aims to improve its systems and identify currently hidden transactions and blockchains.

Chikhanchin said it is not currently possible to cover everything, partly because not all countries are as keen on regulating the industry.

“It’s very difficult when cryptocurrency accounts go into the unregulated zone and we don’t understand who’s on the other end,” he said. “But I think we will solve this task anyway.”

The blockchain technology on which cryptocurrencies are based records transactions but not the identities of wallet owners, making them difficult to track.

Anatoly Aksakov, chairman of the finance committee in Russia’s lower house of parliament, said Thursday the bill regulating cryptocurrencies will be presented to the House in the fall.

“Of course there will be strict regulation,” Aksakov said, comparing “cryptomania” to addiction in the gambling sector, which is tightly regulated in Russia.

“The same must be done with crypto exchanges and trading,” he said. “The phenomenon exists and cannot be ignored.”

The crypto industry has been in the crosshairs of regulators, who fear a recent meltdown in the volatile market could hit the broader financial sector.

The plunge — sparked by the demise of two major tokens in May — has seen crypto lender Celsius suspend withdrawals and Singapore-based crypto hedge fund Three Arrows Capital go into liquidation.

The Central Bank of Russia has said it is ready to allow the use of cryptocurrencies for international settlements and has approved other digital asset transactions.

Aksakov also expects a cryptocurrency mining bill to be considered soon, an area the government hopes to tax.

Unlike payment companies, most crypto exchanges initially rejected calls to ban all Russian users, raising concerns among US lawmakers that digital assets could be used to circumvent Western sanctions against Moscow over its actions in Ukraine.

Major exchanges said they would comply with sanctions by blocking sanctioned users. In April, Binance froze deposits and trades for Russian users with crypto assets of more than €10,000.

Leave a Comment