Russia outlines criminal-liability regime for cryptocurrency operations

An essential condition for bringing criminal liability for cryptocurrency operations in Russia is the existence of transactions involving property obtained by criminal means. This was stated by representatives of Rosfinmonitoring in a comment to РБК.

Referring to the recent decision of the Supreme Court, the agency explained that liability for the legalization of criminal proceeds arises “upon establishing the very fact of conducting financial operations with the aim of giving a lawful appearance to ownership, use and disposal of monetary funds or other property”.

At the same time, in the financial intelligence service рассказали about a new form of fraud in which criminals offer help in withdrawing funds from blocked exchange wallets. For their services they demand payment of a “tax on legalization”.

In 2022, law enforcement officers, based on Rosfinmonitoring data, uncovered 11 financial pyramids. In addition, more than 60 criminal cases were opened against their organizers and participants.

To curb financial fraud involving cryptocurrencies, the financial intelligence service prepared a proposal for mandatory full identification of clients on trading platforms when the operation amount exceeds a certain limit. The package of bills is already under discussion in the government.

In 2022, Rosfinmonitoring received from banks around 70 000 reports of suspicious transactions, which were allegedly linked to illicit circulation of digital currency.

In its work, the agency uses Russia’s cryptocurrency transaction analysis tool — “Transparent Blockchain”. With its help, several cases of bribes paid in digital currency and a contract killing paid with such assets have already been uncovered.

As of March, Rosfinmonitoring tracked more than 25 000 participants in cryptocurrency transactions.

Earlier, the Russian Finance Ministry introduced into a bill regulating cryptocurrency mining a provision on criminal liability for failing to declare digital assets.

In December 2022, Rosfinmonitoring supported a ban on payments in cryptocurrencies, restrictions on their advertising, and the need for explanatory work on the high risk of such assets.