Russia’s Central Bank Classifies Crypto-related Transactions as a Likely Money Laundering Risk

News / 17.02.2020

According to a report published by Russian finance on February 17, the Central Bank of Russia (CBR) released a new set of rules to deal with distrustful transactions. The new rules state that any transactions related to cryptocurrency are a potential money laundering risk.

The new rules are an update to directive 375-P and it states signals for suspicious activity that could be associated with money laundering. The initial rules were released in 2012, making this the first update since then.

The CBR came up with the rules together with the Federal Service for Financial Monitoring (Rosfinmonitoring). According to CBR’s representative, this is for the addition of new schemes for managing unusual operations, while considering the new developments in financial markets.

Before now, the CBR’s head said that it was necessary to reduce the number of likely risk factors. It is a common practice worldwide for a bank or another financial service provider to possibly freeze a suspect’s account or close it completely in severe cases, when some transactions appear suspicious.

Despite the consolidation of the list, the regulators generalized all activities related to cryptocurrency as a likely risk.

The same framework states that some caveats are required to consider cash operations as suspicious. One example is regularly cashing out of most of the money obtained from a legal entity.

When it comes to cryptocurrencies, activities identifiable as buying or selling will be considered a money laundering risk. In general, it has to do with deposits and withdrawals from familiar exchanges.

This is part of the efforts by the country’s legislators to make amendments  to the digital financial asset law proposed in 2018. Things have turned negative for cryptocurrency payments in the country as the regulators are considering nationwide bans.

Featured image courtesy of Shutterstock. Source: Cryptopress

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Dacosta Osei-Tutu, a first degree holder in Nursing, who couples his Nursing career with blockchain blogging, has a great passion for the blockchain technology and aims to play a vital role in applying this revolutionary technology to disrupt the healthcare system in Africa.