As regulation approaches, Russia will increase oversight of cryptocurrency transactions

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In opposition to a government eager to control the industry, the Bank of Russia has long expressed doubt about cryptocurrencies, citing concerns about financial stability, and has argued for a complete ban on trade and mining.

  • The production of this material took place in Russia, where it is illegal to cover Russian military activities in Ukraine.

As Moscow introduces laws on what one lawmaker labeled “cryptomania,” Rosfinmonitoring, Russia’s financial monitoring agency, said on Friday that it was employing software to watch cryptocurrency transactions and hoped to enhance its powers.

In opposition to a government eager to control the industry, the Bank of Russia has long expressed doubt about cryptocurrencies, citing concerns about financial stability, and has argued for a complete ban on trade and mining.

According to Rosfinmonitoring’s director Yuri Chikhanchin, Russia has already discovered particular criminal instances involving cryptocurrencies. He also stated that the organization intends to strengthen its systems and find transactions and blockchains that are now hidden.

Due in part to the fact that not all nations are as ready to control the business, according to Chikhanchin, it is not now viable to cover everything.

When cryptocurrency accounts enter the unregulated area and we don’t know who is on the other end, it is really tough, he said. But I believe we can still do this mission.

The blockchain technology that underpins cryptocurrencies makes it difficult to track transactions because it does not record the identity of wallet owners.

The lower house of the Russian parliament’s financial committee chairman, Anatoly Aksakov, announced on Thursday that draft legislation governing cryptocurrencies would be presented to the house in the autumn.

Aksakov compared “cryptomania” to addiction in the gambling industry, which is strictly regulated in Russia, and added, “Obviously there will be stringent regulation.”

“The same needs to be done with trading and cryptocurrency exchanges,” he said. The phenomenon is real and cannot be disregarded.

Regulators have targeted the cryptocurrency market because they are concerned that a recent crash in the volatile market could affect the larger banking system.

Due to the downturn, which was precipitated by the failure of two significant tokens in May, cryptocurrency lender Celsius has halted withdrawals, and Singapore-based cryptocurrency hedge fund Three Arrows Capital has filed for liquidation. read more

The central bank of Russia has said it is open to permitting the use of cryptocurrencies in cross-border settlements and has given the go-ahead for other digital asset transactions.

Aksakov anticipates that legislation governing cryptocurrency mining, which the government seeks to tax, will also be reviewed soon.

Most cryptocurrency exchanges originally refused requests to block all Russian customers, unlike payment businesses, which led to worries among American politicians that digital assets would be used to get under Western sanctions on Moscow for its actions in Ukraine.

Important exchanges declared that they will abide by sanctions by barring sanctioned customers. For Russian users with crypto holdings worth more than 10,000 euros, Binance halted deposits and trading in April.

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