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Russian Central Bank Pushes for Blocking of Suspicious Crypto Activity

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In an official statement, the Russian Central Bank is seeking the assistance of local commercial banks to curb the shadow economy. The banks should identify e-payment providers and crypto-exchange cards associated with illegal business activity. With corporations from the local banks, the Russian regulator can block crypto purchases. According to the Bank of Russia’s deputy governor, Sergey Shvetsov, the stringent measures will stop suspicious crypto activities and protect Russian investors.

The press statement came at a period when cryptocurrency investments were increasing in popularity in Russia. Therefore, the aim could be to cushion crypto investors in the country from cryptocurrency market crashes. However, the Bank of Russia has been introducing multiple anti-crypto policies. For instance, in July, the regulator issued a directive to local banks to avoid listing companies offering crypto-related services. Besides, it has restricted cryptocurrency trading in major banks in the country.

Recently, the Russian Central Bank urged commercial banks to pay attention to financial transactions related to cryptocurrency exchange services. However, the statement on September 10th went a step further by demanding the banks to block the accounts, credit cards and e-wallets associated with suspicious activity.

The deputy governor also set up the criteria for blocking accounts and identifying shadow economy players. For instance, illegal casinos, forex dealers, crypto internet exchangers, and pyramid schemes are considered illegal, and banks should stop servicing the transactions. Banks must also identify accounts with multiple counterparties or more than ten recipients per day. If a customer’s average balance is below 10% of the transaction volume, the bank should look into the business activities.

While the directive by the Russian regulator makes crypto trading difficult, it doesn’t come as a surprise. They have called for a blank ban on digital currencies in the past. However, cryptocurrency enthusiasts can still trade since there is no direct legal prohibition against crypto. Besides, other government bodies are embracing cryptocurrency usage.