BBC News Russia has reported the quest by the Russian Federal Financial Monitoring service to develop a toll for tracking of crypto transactions particularly Bitcoin transactions.
According to the report, the new tool is expected to be incorporated in the organisation’s monitoring system by the end of 2018. The organization is supposedly out to tackle fraud and funding of terrorism through cryptocurrencies and the proposed tool will bring together fragments of information on fraud and help to connect related cases.
The institute for security and analysis (SPI) which had developed a software iRule for the monitoring service in the past has been awarded the contract to develop the monitoring programme at the cost of $2.9 million. iRule has been used not only by the service but also Russian security forces and insurance companies
A public document describes the tool as one that will enable tracking of transactions in cryptocurrency and users of crypto wallets. This software will be able to unveil a user’s name, phone number, credit card, bank account and details of cryptocurrency transactions including wallet number.
This isn’t coming as a surprise because the Russian government has always frowned at cryptocurrencies because of its anonymity since 2014, saying it is right to label it as illegal.
A former adviser to Russian president Putin on internet German Klimenko, who played a key role in blocking Telegram in the country spoke with BBC telling them where the government stands as far as cryptocurrency is concerned. His words:
“Due to anonymity and the inability to find sources of transactions, cryptocurrencies are used in a gray area. For example, in the Darkweb to purchase weapons, drugs or violent videos. Lawmakers in many countries are concerned about this phenomenon which was confirmed by the analysis that we conducted on behalf of the president.”
The Russian State Duma’s Committee for Legislative Work had declared this year its support for the first reading of a proposal to establish guidelines for the crypto economy including the citizens’ interaction with cryptocurrencies.
The head of the committee said the goal of the proposal is to “minimize the existing risks of using digital objects for transferring assets into an unregulated digital environment for legalization of criminal incomes, bankruptcy fraud or for sponsoring terrorist groups.”
Although the government considers cryptocurrency transactions illegal, it does admit that digital signatures used in smart contracts are as good as written consent in physical contracts.
This shows there is hope for cryptocurrency in Russia although the government is seeking to remove anonymity which is a vital aspect of the cryptocurrency system.