Russia will improve cryptocurrency transaction monitoring as regulation tightens, according to Rosfinmonitoring

Russia will improve cryptocurrency transaction monitoring as regulation tightens, according to Rosfinmonitoring

Russia will improve cryptocurrency transaction monitoring as regulation tightens, according to Rosfinmonitoring.

The Bank of Russia has long been skeptical about cryptocurrencies, citing worries about financial stability.

Rosfinmonitoring, Russia's financial monitoring agency, said on Friday that it is employing software to watch cryptocurrency transactions and intends to increase its powers as Moscow regulates what one legislator labeled "cryptomania."

The Bank of Russia has long expressed skepticism about cryptocurrencies, citing financial stability concerns, and has urged for a total ban on trade and mining, which runs counter to the government's desire to regulate the industry.

According to Rosfinmonitoring's head, Yuri Chikhanchin, Russia has already discovered particular criminal incidents using cryptocurrencies, and the agency aims to strengthen its systems and uncover transactions and blockchains that are now concealed.

According to Chikhanchin, it is presently not possible to cover everything, in part because not all governments are keen to control the business.

"It's really problematic when bitcoin accounts enter an unregulated zone and we don't know who's on the other end," he explained. "However, I believe we will complete this mission."

The blockchain technology that underpins cryptocurrencies records transactions but not the identities of wallet owners, making it harder to monitor them.

Anatoly Aksakov, head of Russia's lower house of parliament's finance committee, said on Thursday that draft legislation governing cryptocurrencies will be presented to the house in the autumn.

"Obviously, there will be stringent control," Aksakov added, equating "cryptomania" to gambling addiction in Russia, which is strictly regulated.

"The same should be done with cryptocurrency exchanges and trade," he stated. "There is a phenomena, and it cannot be ignored."

Regulators have targeted the cryptocurrency business, fearing that a recent crash in the volatile market would affect the larger financial system.

The drop, precipitated by the failure of two major coins in May, has led to the suspension of withdrawals by crypto lender Celsius and the liquidation of Singapore-based crypto hedge fund Three Arrows Capital.

The Russian central bank has stated that it is open to the use of cryptocurrencies for foreign settlements and has permitted other digital asset transactions.

Aksakov also anticipates that a cryptocurrency mining law, which the government seeks to tax, would be adopted shortly.

Unlike financial businesses, most cryptocurrency exchanges initially refused proposals to block all Russian customers, raising fears among US senators that digital assets may be used to avoid Western sanctions imposed on Russia for its activities in Ukraine.

Major exchanges have said that they will abide by sanctions by barring sanctioned customers. Binance suspended deposits and trading for Russian users with crypto assets worth more than EUR 10,000 in April (roughly Rs. 8.08 lakh).

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