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Russia's Federal Financial Control Service (Rosfinmonitoring) commissioned an analytical tool to monitor cryptocurrency transactions. The system will focus in particular on bitcoin, as reported by the BBC's Russian service.
Plug In, Baby
Rosfinmonitoring, whose responsibilities include the fight against financial fraud and terrorist financing, already use a tailor-made unified information system. This allows for the inclusion of disparate information on suspects in financial crimes, in order to find connections between them.
By the end of 2018, the system should have the additional functionality to process transaction and bitcoin wallet information. This, of course, is based on linking a portfolio to a person, a bank account or a telephone number first.
The contract went to the Moscow Institute of Information Security and Analysis (SPI). Along with other updates of the system, it will be worth 195.5 million rubles (2.87 million US dollars).
Scholarships sanctioned by the state [19659003] The legality of the use of cryptocurrency in Russia has long been questioned, even if a bill "On digital financial resources" is currently being read in the State Duma. If converted into law, this means that only licensed operators can process cryptocurrency transactions.
It can be assumed that these operators have to pass all the information collected through the KYC / AML procedures directly to the Russian authorities. With this information, the system could connect a suspect to others through the movement of funds.
Order forces in the United States and Europe use similar tools to "follow the trail of bread crumbs" in financial crimes.
A microbe in a drop of water
The Internet expert Anton Merkurov believes that the system could actually have opposite effect. He thinks that such monitoring will only lead to greater obfuscation from cryptocurrencies in order to make them impenetrable to the governing bodies.
The perpetrators are also able to confuse attempts to track the forces of order by creating a new portfolio for each transaction. [19659004] Also underlines that, compared to the total amount of recycled funds, the one recycled via cryptocurrency is relatively small. The business trip through LocalBitcoins is up to 1 billion rubles a week. Compare it to Colonel Zakharchenko, a police officer who was found with about 9 billion rubles
Merkurov compares this process to trying to find a microbe under a microscope in a drop of water.
What do you think? about Rosfinmonitoring? Let us know in the comments below!
Images courtesy of Bitcoinist archives, Shutterstock.
