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5 Aug, 2021 06:47

Bitcoin cops: Russia to create service to monitor cryptocurrency transactions as authorities seek to fight cybercrime & terrorism

Bitcoin cops: Russia to create service to monitor cryptocurrency transactions as authorities seek to fight cybercrime & terrorism

Russia’s financial monitoring service has commissioned the creation of a system that will be able to track cryptocurrency like bitcoin, allowing Moscow to analyze the behavior of market participants and potentially identify users.

That’s according to Moscow business daily RBK, which also revealed that the tracking service will be created by a subsidiary of SberBank, the country’s largest banking and financial services company.

As per the tender documentation, the service will be able to provide data on the value of a cryptocurrency wallet, as well as track transactions.

The governmental monitoring service, Rosfinmonitoring, plans to use it to follow cryptocurrency chains and analyze behavior, enabling the agency to create a database of cryptocurrency wallets associated with illegal activities and terrorist financing.

An oft-quoted benefit of cryptocurrencies like bitcoin and ethereum is the public blockchain, meaning anyone can see every single transaction ever made. However, the money is sent to an anonymous string of letters and numbers, making it hard to identify the owner of each cryptocurrency wallet. Moscow Digital School expert Yefim Kazantsev told RBK that, in his opinion, the proposed Rosfinmonitoring system will be aimed at de-anonymizing users.

With the growth in popularity of cryptocurrencies, virtual assets are being used more and more as a way to launder illegally gotten gains. In August last year, President Vladimir Putin signed a law allowing Russians to buy and sell digital denominations, moving the market out of a so-called "grey zone" in financial law. However, businesses in the country cannot accept digital denominations on a par with the ruble, as they are not counted as legal tender.

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