Russian Central Bank Directs Financial Institutions to Supply Transaction History of Private Persons/Entities

Russian commercial banks will be asked by the Central Bank of Russia to provide data relating to transfers of funds between individuals to individuals, however, the aim is to find out what crypto transactions were made by private individuals. The directives of CBR would directly affect the business of online exchanges that CBR believes are involved in illegal activities.

There are certain transactions that the Central Bank of Russia (CBR) assumes as illegal. In an effort to identify such transactions, CBR has decided to seek out information related to the transfer of funds between individuals to individuals. The decision of CBR is going to affect especially online exchangers of cryptocurrencies that have established fake accounts for illegal activities. In addition, the move is likely to impact the business of websites that are providing crypto trade services.

The news regarding the decision of CBR was revealed by a local news platform called “RBC”. According to news agency RBC, CBR has already sent request letters to financial institutions for providing transaction history of their customers. The data required must contain information as to who transferred the funds and who had actually received the funds.

Later on, CBR issued a clarified statement that the information hasn’t been sought for employing any control over the accounts of individuals. Instead, the aim of the initiative is to identify the grey areas which contain risks. CBR said that individuals holding accounts and digital wallets as well as financial institutions would be required to provide such information. CBR further noted that there are certain online web portals and casinos where accounts and wallets have been established in fictitious people. The regulator accused online crypto exchangers primarily of opening such fake accounts.

The ultimate aim of the regulator is to find out as to which particular individual or crypto entity is/are involved in carrying out illegal activities. CBR further clarified that there is no new or amended policy being put in place for obtaining the data and information. For instance, CBR does not wish to employ any “reporting” requirement. Instead, it wants to seek information particular of those transactions which involve huge sums of money being transferred to individuals and entities. The bank further noted that it is quite a usual practice of money launders to transact huge sums of money through multiple transactions. Sometimes transactions are funded into the accounts of multiple fake accounts and in some cases, one account receives multiple transactions in intervals.

The regulating bank of Russia is of the view that normally huge fund transfers do not take place between individuals and entities.

Meanwhile, Government in Russia has been proposing to properly regulate the country’s digital currency/asset market. In this connection, a law on digital currencies/assets had been introduced which will come into force in 2022.

By Mike McIntosh
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