The prospective amendments to Russia’s crypto regulations are meant to fight money laundering and promote legal crypto adoption.
Officials from Russia’s Duma Committee on Financial Markets hope to implement a mandatory identification process for users of cryptocurrency, according to a March 7 report in local Russian news outlet Izvestia.
Izvestia reports that the Duma Committee plans to amend existing regulations to require a mechanism that can identify users of digital financial assets. Users will need a special “visa” to transfer money from Russian bank accounts and convert them into cryptocurrency or other digital financial assets. The amendments are part of an effort to combat money laundering and will be brought before the State Duma during the second reading, which will take place this year.
Duma Committee Chair Anatoly Aksakov told the Russian news outlet that any private “cryptotool” – meaning any exchange platform, digital wallet, or virtual currency custodian – will be required to adhere to the new identification policy. Those exchanging Russian rubles for virtual currency will also be required to identify themselves or face a maximum of 15 years in prison.
Russian officials hope that, if passed, the amendments to existing regulations will not only help spur the adoption of virtual currency in Russia, but also reassure companies and citizens that they are operating legally.
No specific mechanism for this identification process has been announced and no governing body has been assigned to oversee it. Neither the Central Bank of the Russian Federation nor the Federal Financial Monitoring Service of the Russian Federation (Rosfinmonitoring) has voiced an opinion about the new identification requirement.
Know-your-customer regulations are becoming par for the course with cryptocurrencies. In December 2017, the European Parliament (EU) and the European Council (EC) developed regulations forcing crypto exchanges to identify their customers. In April 2018, the EU and the EC approved regulations to combat money laundering and “end the anonymity associated with virtual currencies, virtual currency exchange platforms and custodian wallet providers.”
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