Duma deputy says FSB pressure on the Bank of Russia is a fabrication, outlines concept for regulating the crypto market

Andrey Lugovoy, the deputy chair of the State Duma committee on security and anti-corruption, said that reports of pressure by the FSB on the Bank of Russia regarding a ban on cryptocurrencies are not true. He said this at an RBC conference.

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\”In our working group, which includes representatives from all law enforcement agencies, we have heard from no one that a ban is absolutely necessary. It is under discussion. In this sense, I see that everyone is in favour of regulation,\” Lugovoy said.

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\”But it’s not up to the Bank of Russia to decide what to ban or permit. The Bank can only offer in a figurative sense. This is a deliberately prepared PR campaign to bring the agenda back to itself,\” the deputy said.

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According to Lugovoy, the central bank is blocking amendments to a bill amending the Tax Code, preventing its passage in the second reading for almost a year.

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The deputy noted that the relevant legislative proposals have been drafted and are under discussion within the working group, whose participants backed them.

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They are set to be introduced in February–March. They envisage defining a clear circle of entities authorised to conduct cryptocurrency operations.

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Among them are authorised and licensed banks and crypto-exchanges, as well as foreign exchanges, which will have to register in Russia.

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Lugovoy noted that discussions are currently underway about who will be the market’s main regulator.

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It is envisaged that participants will be required to undergo identification and comply with KYC/AML procedures. Crypto assets will be checked for use in criminal transactions.

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Lugovoy also criticised the Bank of Russia’s statements about the risks of cryptocurrencies due to their anonymity. He argued that blockchain enables tracing all transactions and helps to identify the criminal undertone of certain events more quickly than cash rubles.

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\”If the Bank of Russia pushes us by force from the grey zone into the black, then we will face high-profile crimes,\” the official said.

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Earlier media reports said that the FSB convinced the head of the Bank of Russia, Elvira Nabiullina, to back a full ban on operations with cryptocurrencies in Russia, in order to deprive the opposition and foreign agents of access to funding.

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Later, the Bank of Russia released a report in which it proposed to ban the circulation and mining of cryptocurrencies on Russian territory.

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In the government, the State Duma and security agencies did not back the central bank’s position. In the Finance Ministry they said that cryptocurrencies should be regulated, not banned.

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