Russian AML Body Now Monitors Cryptocurrency Transactions

Russia has chosen to take strident steps to monitor and regulate the usage of cryptocurrency in the country. As such, the Russian anti-money laundering body, Rosfinmonitoring, has set about a campaign to monitor transactions that involve the transfer and exchange of crypto to fiat currency (Russian Rubels specifically).

Russian banks have quickly rallied to assist the unit in their monitoring by sending regular leads of suspicious accounts to them to follow up on. The deputy in charge of the anti-money laundering authority, Herman Neglyad, had this to say of the support:

“Banks have already begun to pay attention to exchange operations, that is, when they see that an operation has come after the exchange of virtual assets for hard currency, they have already begun to evaluate them and actually inform us about these operations.”

The monitoring organisation, along with the country’s central bank, is due to introduce a special code system to classify suspicious transactions in the future and to earmark potential threats.

Crypto Crime Needs to Be Capped

Cryptocurrency and blockchain technology are certainly the way of the future. The principles of decentralisation and the technological marvels of the ledger system are ready to pave the way for the future of the financial world and the virtual asset market. Cryptocurrencies have also proven to be a popular and lucrative way to invest your money if you do not mind the volatility and risk involved.

Unfortunately, the decentralised and anonymous nature of crypto lends itself to misuse by criminal elements. President Putin has made his concerns about crypto crime clear in the past. He said that the increasing use of digital assets by criminal elements justified a move for increased monitoring.

Blockchain certainly does provide the ideal conduit to launder money. Thankfully, like many other countries, Russia has opted to invest in alternative solutions to solve the problem rather than outright ban the trade of Bitcoin and other alternate virtual assets.

Though it is not clear, it does seem likely that it is no coincidence that the Rosfinmonotring officials have increased their vigilance of the market following the president’s show of disdain. It seems clear that there is a plan to bring some sort of regulation to the market.

The Russian government has already imposed harsh penalties against any individuals that fail to disclose their crypto holdings after they surpass a specific threshold. This, together with the new monitoring protocols should make criminals uncomfortable going forward.

 The Challenges of Crypto Regulation

Bitcoin and the like are specifically configured to evade the clutches of political manipulation. By eliminating a centralised server, decentralised currencies become difficult to monitor on the chain.

The decentralised environment makes it unnecessary for individuals to declare their personal identities when undertaking crypto to crypto transactions, making it almost impossible for policing agencies to monitor illegal movement.

It is for this reason, that countries like Russia have moved to monitor the situation at the fiat currency level, where regulation is imputable. We can expect that things are about to get much tougher at the ‘exchange level’ where more and more interest will be shown by government agencies in the near future.