Russia’s central bank is taking steps to combat illegal crypto activities and suspicious financial transactions by developing a new platform. The goal of this platform is to prevent shadow businesses from misusing banking services for illegal purposes, specifically targeting crypto-to-fiat over-the-counter platforms that bypass Know Your Customer (KYC) procedures.
According to reports, the Bank of Russia is working in collaboration with the country’s financial watchdog, Rosfinmonitoring, as well as local banks and experts to create a system that will help identify and block individuals involved in illegal financial transactions. Bogdan Shablya, head of the financial monitoring and currency control service at the Bank of Russia, shared that the platform will enable the central bank to share information about suspicious activities with financial institutions, enabling them to prevent illicit financial dealings.
One of the main focuses of the platform will be on individuals, commonly referred to as “droppers,” who offer their bank cards for money laundering or illegal activities such as transactions related to drugs, online casinos, crypto exchanges/OTC services, or pirated websites.
Shablya outlined that the central bank has already established online monitoring systems with certain banks to track individual transactions. However, the current system only allows for sharing information about “droppers” with the banks where these clients hold accounts. To address the issue of bad actors opening accounts in multiple banks, there is a need to centralize data and share information with all credit institutions.
Currently, banks do not have the authority to deny someone an account solely based on suspicions of involvement in drop activities. The most they can do is open an account and restrict remote banking services for that account. However, these actions are typically taken after suspicious transactions have already taken place.
The timeline for the platform’s launch remains unclear, as Shablya mentioned that the development is still ongoing. The central bank aims to find a solution that effectively addresses the problem without creating social unrest or impacting law-abiding citizens.
In conclusion, Russia’s central bank’s efforts to combat illegal financial activities through the development of this new platform demonstrate a proactive approach to safeguarding the integrity of the financial system. By collaborating with various stakeholders and leveraging technology, the central bank is working towards a more secure and transparent financial environment.