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Russia to either ban or regulate crypto exchangers in 2022

Russia to either ban or regulate crypto exchangers in 2022

Last updated 19th Jan 2022

Herman Neglyad, Deputy Director of Russia’s Federal Financial Monitoring Service has said that his country must decide to either regulate or ban “virtual currency exchangers” in 2022. 

Money laundering among risks highlighted

Cryptocurrencies have been widely recognized as risky bets. 

The financial services industry around the globe seems to agree on certain risks associated with cryptocurrencies. 

As people continue using cryptocurrency, risks to institutions are bound to increase. Some may lead to huge losses.

Crypto consumers aren’t spared either, as crypto is very volatile, unregulated, and uninsured. This makes it appealing to people who want to use it for criminal purposes.

Here are some illegitimate schemes that unscrupulous people facilitate using cryptocurrencies:

  • Money-laundering via crypto exchanges/ATMs
  • Adult services
  • Investment scams (like initial coin offerings)
  • Buying on the black market using crypto
  • Human and organ trafficking
  • Fake crypto exchanges
  • Blackmailing
  • Ransomware
  • Phishing

In a bid to manage risks associated with money laundering under Russia’s national risk assessment, cryptocurrencies are considered a high-risk factor for its financial space. 

The national risk assessment was adopted in 2018.

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Speaking at this year’s Banking Legal Conference, Herman emphasized that the Financial Action Task Force (FATF) must protect the points of entry into the official financial system.

The high-ranking official further highlighted two approaches FATF can take — either to regulate or ban crypto exchanges. 

He further elaborated that if crypto platforms were to be legalized, they’d have to go through registration as subjects of anti-money laundering laws. 

“Both options have a right to exist. There are different points of view,” Herman Neglyad commented.

Bank of Russia remains firm against the legalization of bitcoin

In the lower house of the Russian parliament, Elvira Nabiullina, chair, Central Bank of Russia (CBR) made a firm declaration that the bank has “an extremely negative attitude towards cryptocurrencies.” She further described crypto as “private currencies pretending to be money.”

Russia, however, has stepped up its efforts to give its citizens a digital version of the national fiat, the digital ruble, which is meant to facilitate cheap and reliable non-cash payments.

Elvira has supported the need for an alternative, “I have already spoken about the digital ruble – in our opinion, this should develop.” 

Walter Akolo

Walter Akolo

Walter is a writer from Nairobi, Kenya. He covers the latest news on the cryptocurrency market and blockchain industry. Walter has a decade of experience as a writer.