Russia to Start Tracking Bitcoin Transactions by End of this Year

One of Russia’s financial watchdogs has turned their eye to monitoring crypto transactions. A new system, which will be in place in the next few months, has the aim of tracking cryptocurrency transactions, especially those relating to Bitcoin.

The main aim of Russia’s Federal Financial Monitoring Service (Rosfinmonitoring) is to combat financial fraud and terror financing. One of their tools to do this is their Unified Information System. As the name suggests, this program allows users to add seemingly random information to the system, which will then collate the data to find a link and point authorities to the criminal or person of interest.

The end of this year will see the tool introduce a new feature – a cryptocurrency tracker addition, specifically aimed at Bitcoin transactions. BBC Russia reported that in addition to information such as the person’s bank account number, users will be able to add digital wallet details as well.

The Moscow Institute for Security and Information Analysis (SPI) will carry out the update, which, in addition to other system upgrades, will cost just under $3 million.

No Crypto Freedom in Russia

The first deputy chairman of the Bank of Russia, Olga Skorobogatova, has previously stated that the bank has no plans to allow independent cryptocurrency trading. In fact, a draft law titled ‘On Digital Financial Assets’ states that crypto transactions in Russia can only be completed by licensed authorities.

Herman Klimenko, a previous advisor to President Putin believes that these steps are necessary for controlling the “anonymous” cryptocurrencies as they are mainly used to fund illicit activities and to purchase illegal goods.

Bitcoin Tracking Could Encourage Evasion

However, Anton Merkurov feels that this approach is will actually encourage this type of behavior. The editor-in-chief at Satoshi.fm has said via translation:

If you look at the entire volume of laundered funds, the share that is laundered through the cryptocurrency is very small. Let’s say the turnover of the LocalBitcoins exchanger is up to a billion rubles a week, in fact, it’s not very much [compared to the 9 billion rubles in the case of] Colonel Zakharchenko.

Zakharchenko, who was the head of an anti-corruption division of the Russian police, was found with nearly $140 million in unexplained cash. Ironic much?

Merkurov feels that the more Russian authorities push to essentially centralize decentralization in the country, the harder crypto believers will work to make that job as hard as possible for them. One way to do this would be to create different wallets for each new transaction.

Do you think that this new approach to crypto tracking will be successful in Russia? Let us know in the comments below!

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