Financial Crime World

Russia Aims to Introduce Cryptocurrency Regulations by Year’s End Despite Bank of Russia’s Calls for Ban

Introduction

Moscow - In a move that highlights the ongoing debate over cryptocurrency regulations in the Russian Federation, the government has announced plans to introduce a comprehensive regulatory framework for cryptocurrencies by the end of this year.

Roadmap for Regulations

According to a roadmap reviewed by RBK, the Russian news agency, the new regulations will include:

  • Know-your-customer (KYC) and anti-money laundering (AML) rules for cryptocurrency platforms
  • Definitions for their regulatory status
  • A system of compliance control for peer-to-peer (P2P) platforms to be designed by May
  • Adoption of global Financial Action Task Force (FATF) anti-money laundering standards by November
  • Rules for registration and reporting by crypto platforms expected to be created by December

Timeline for Implementation

The roadmap outlines a timeline for the implementation of the new regulations, including:

  • May: Design of a system of compliance control for P2P platforms
  • November: Adoption of global FATF anti-money laundering standards
  • December: Rules for registration and reporting by crypto platforms

Consequences of Non-Compliance

Failure to declare cryptocurrency transactions could result in administrative and criminal punishment, according to the document.

Plan to Introduce Reporting Requirements

There is a plan to introduce a law requiring Russians to report their cryptocurrency holdings, as well as a method for defining the prices of crypto assets.

Bank of Russia’s Opposing Stance

However, the Bank of Russia has taken an opposing stance, calling for a full ban on cryptocurrency trading, mining and payments. According to sources cited by RBK, the central bank believes that cryptocurrencies pose a threat to financial stability and consumer protection.

Study of China’s Ban

The Bank of Russia has been assigned to study China’s ban on cryptocurrencies, which has sparked controversy among experts and investors.

Proposed Regulatory Framework

The Ministry of Finance had previously proposed its own regulatory framework, which included making banks responsible for KYC procedures and limiting non-qualified investors’ ability to trade complex investment instruments.

Compliance Procedures

Compliance procedures will be based on those employed by Aximetria, a Swiss crypto startup with Russian roots recently acquired by Tinkoff Bank. Transactions will be tracked by Rosfinmonitoring’s homemade transaction tracking tool, Transparent Blockchain, while P2P platforms will register with the Bank of Russia and foreign exchanges will be required to open a branch in Russia.

Conclusion

The development comes amid growing concerns over the potential risks associated with cryptocurrency trading, particularly in countries where regulations are lacking or unclear. The Russian government’s move to introduce comprehensive regulations is seen as a step towards addressing these concerns and promoting a safer and more transparent environment for investors and consumers.

Key Takeaways

  • Russia plans to introduce a comprehensive regulatory framework for cryptocurrencies by the end of this year
  • The framework will include KYC and AML rules, definitions for their regulatory status, and compliance control procedures
  • The Bank of Russia has called for a full ban on cryptocurrency trading, mining and payments, citing concerns over financial stability and consumer protection
  • The government’s move is seen as a step towards promoting a safer and more transparent environment for investors and consumers.