The Federal Financial Monitoring Service of Russia is going to start tracking cryptocurrency transactions. The agency has already selected a contractor to develop the platform. The entity is affiliated with one of Russia’s largest financial institutions, Sberbank.
Rosfinmonitoring to Keep Record of Cryptocurrency Wallets Used for Illicit Purposes
Russia’s financial watchdog, Rosfinmonitoring, has selected a contractor for the building of a platform that will be used to track cryptocurrency transactions in the country. The company that won the tender, RCO, is managed by Rambler Internet Holding which is affiliated with the banking giant Sberbank, Russian crypto media reported.
The Unified Information System in the Field of Procurement portal shows that the project has a price tag of an estimated 14.7 million rubles (over $200,000). The money will be spent to enable the regulator to closely monitor illegal transactions involving cryptocurrencies. According to Rosfinmonitoring, the initiative aims to ensure compliance with the law and increase transparency in the crypto industry.
The platform will be expected to perform multiple tasks such as tracking flows of digital financial assets as well as identifying and profiling participants in the crypto market to assess their economic roles and behavior. RCO will have to create and maintain a database of cryptocurrency wallets associated with illicit activities and financing of terrorism.
Russia to Identify Crypto Users Suspected of Criminal Activities
Unlike other tools that analyze crypto transactions, the new platform should also reveal the identities of crypto users suspected of involvement in illegal activities, said Moscow Digital School associate Efim Kazantsev, quoted by Bits.media. However, he noted that with closed blockchains, the disclosure of user data will depend on the networks. Regulators and law enforcement agencies will probably be able to access this information only as part of ongoing investigations, Kazantsev elaborated.
The processing of cryptocurrency transactions also involves recording data outside the blockchain. For example, with internet providers, explained Maria Stankevich, director of development at crypto exchange Exmo. Using this type of information, an IP address can be established and a sender identified.
It is possible to de-anonymize transaction participants even on confidential blockchains such as Monero and Zcash, added Nikita Zuborev, senior analyst at the Russian exchange aggregator Bestchange.ru. He is convinced the latest big data analytics tools would be able to handle that.
Bitcoin (BTC), ethereum (ETH), and monero (XMR) are the most popular cryptocurrencies among criminals, according to Rosfinmonitoring. Earlier this year, it was announced that the agency had developed a crypto tracking system called ‘Transparent Blockchain.’ The motives for building a new one now remain unclear.