Russian authorities are planning to introduce additional controls over bank transactions carried out with funds from cryptocurrencies, as the state looks to stamp out money laundering conducted by converting digital assets.
That’s according to German Neglyad, the deputy head of Russia’s Financial Monitoring Service, Rosfinmonitoring.
With the growth in popularity of cryptocurrencies, virtual assets like bitcoin are being used more and more as a way to launder illegally gotten gains. Last summer, a law signed by Russian President Vladimir Putin legalized digital currency, lifting it out of an unregulated ‘grey zone’, but didn’t go as far to recognize it as legal tender. The bill came into force at the start of this year.
Its legalization also came with other regulations, including requirements for owners, such as the obligation for Russian officials to declare if they have any digital assets, alongside what they physically own.
Now, Rosfinmonitoring is taking another step. The latest move will see the watchdog keep track of transactions occurring directly after the conversion of digital assets into Russian rubles, in order to see what happens with the proceeds. Some believe this is just a start, and the watchdog will eventually decide to completely ban cryptocurrencies as a means to both fight crime and collect taxes.
Speaking to the State Duma committee on financial markets last week, Neglyad revealed that the country’s financial institutions have started reporting certain activities to Rosfinmonitoring.
“Banks have already started to pay attention to exchange transactions,” Neglyad said. “That is, when they see that a transaction came after the exchange of virtual assets into hard currency, they have already started to assess them and report to us about these transactions.”
He also noted how Russia actively cooperates with financial intelligence units of foreign countries to monitor cross-border crime and the usage of bitcoin to finance terrorism.
Earlier this year, the country’s Cybercrime Investigation Department revealed that Russian contract killers are increasingly being paid in cryptocurrency, and are using multiple wallets to stay anonymous.
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