New Guidelines from the Central Bank of Russia: A Crackdown on Cryptocurrency Transactions

Central Bank Updates Regulations

On February 17, the Central Bank of Russia (CBR) unveiled a fresh set of guidelines targeting suspicious transactions, particularly those involving cryptocurrencies. According to the renowned finance publication RBC, the update categorically marks any dealings related to cryptocurrencies as potential hotbeds for money laundering.

A Historic Shift Since 2012

This latest update amends directive 375-P, which outlines warning signs of suspicious financial activity—an update emerging for the first time since its inception in 2012. Given the rapid evolution of financial markets, the manual was crafted with the assistance of the Federal Service for Financial Monitoring, also known as Rosfinmonitoring. A representative from the central bank stated that the revisions were necessary to address new strategies for unusual operations.

Reduced Risk Factors? Not Quite!

The head of the central bank previously voiced hopes of reducing the number of recognized risk factors. However, with the recent alterations, it seems like the focus has shifted to categorizing a wider array of transactions as suspicious. For instance, if a financial institution flags certain transactions, that could lead to freezing the corresponding accounts, or, in dire circumstances, closure of the account altogether. A hefty price for playing in the crypto sandbox!

Cryptocurrency: The Undisputed Risk

Even though the list of risk factors may have been trimmed down, regulators have thrown a wide net. Any activity deemed to involve cryptocurrencies is now classified as a money laundering risk. For example, if an individual swaps their crypto at an exchange, that’s an instant red flag. This regulation extends to cash operations, which also have to meet specific criteria to be seen as suspicious.

What Lies Ahead for Cryptocurrencies in Russia?

This regulation comes amid ongoing discussions in the Russian legislative arena concerning digital financial asset laws, initially proposed back in early 2018. The regulators’ recent hardline stance towards cryptocurrency has left many crypto enthusiasts sweating bullets, as nationwide bans on using cryptocurrencies for payments are reportedly on the table.