Russia Intensifies Efforts to Regulate Crypto Transactions
Given the furtive nature of cryptocurrencies, they are a perfect subterfuge for facilitating criminal operations. However, the Republic of Russia is looking to curtail this challenge with the aid of a crypto tracing tool, which it has committed $200,000 towards. Also, Russian authorities have awarded the contract to a firm endorsed by the country’s largest banking institution, Sber.
RCO will be saddled with the responsibility of overseeing crypto transactions made within the country to other regions with the tracing tool. Russian Federal Financial overseeing Service, otherwise known as Rosfinmonitoring, will oversee the operations of RCO.
RCO to Build a Tool for Tracing Transactions Made with Crypto Assets
Moreover, per details of the signed agreement, RCO will be required to build an overseeing tool for tracing the transfer of digital financial assets while also having a record of crypto wallets that have engaged in unlawful transactions and keeping tabs on the behavior of those using crypto so that defaulters can be identified. With the tool, Russian authorities will collate the profiles of crypto users, determine their status in the crypto ecosystem and also decipher the possibility of them getting involved in unlawful operations.
Russia’s Rosfinmonitoring noted that the crypto tracing tool would consolidate the efforts being made by regulators to ensure financial oversight and compliance. Since 2020, the regulatory body has stated its intentions to oversee the transfer of crypto assets. At the time, it announced an initiative it referred to as the ‘Transparent Blockchain’ with the mindset of overseeing the transfer of crypto assets. Overall, the Rosfinmonitoring aim is to partly reduce the anonymity of crypto transactions made with Bitcoin and a host of other crypto assets.
In a related development, the EU stated plans through its European Commission arm to eliminate the use of anonymous wallets, which it claimed aided and abetted money laundering and terrorism financing. Anonymous wallets are notorious for shrouding the identity of their users, such that the only traceable item to them is their public key.
EU Proposes Law Against Anonymous Wallets
According to the EC, it will introduce a legislation that compels crypto platforms to add relevant details of the parties to a crypto transactions, such as full names, location, email addresses. It will be difficult to enforce compliance for such legislation owing to the decentralized feature of cryptocurrencies. Cryptocurrencies were built to eschew third party interference and provide users with privacy and control.
Instances where cryptocurrencies have been used to carry out unlawful operations include- the ransomware attack on over 200 US companies in July, which saw their networks grounded for a few days. After perpetrating the cyber attack, the reportedly Russian hackers demanded Bitcoin payments to restore the systems. Similar attacks had occurred earlier in May. Meanwhile, Finnish regulators recently announced that they would contract the services of three brokers to help trade off about 2,000 BTC which are confiscated proceeds from a drug deal back in 2018.
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