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The Financial Financial Monitor service, or Rosfinmonitoring, has reached a limited liability company to develop an analytical tool to track cryptocurrency transactions, BBC Russia reported.
The Russian guard dog requires the addition of a crypto-tracking tool to an anti-financial crime system. The method as a whole would allow the monetary police to organize suspicious financial assets in a row of detectable data. Cryptocurrencies like Bitcoin that governments perceive as safe and anonymous tools to feed financial crimes would become the subject of continuous auditing, according to Moscow's indications to stem crimes related to cryptography.
The crypto-tracking tool expects to receive and process information on Bitcoin portfolios and transactions. Cryptographic information would become part of a full-fledged report on suspects, which would also include their names, bank accounts, credit or debit card details, and their traditional transactional records.
Rosfinmonitoring granted a contract of 195 million rubles to the Moscow Institute for Security and Information Analysis (SPI) to develop the system described above by the end of 2018. The regulator has a history of conviction of Bitcoin and similar cryptocurrencies, the first example is its effort to make digital transactions illegal in 2014.
However, Russia's position on Bitcoin has eased somewhat after the United States imposed economic sanctions on them. Moscow is now in the process of finalizing the cryptocurrency and ICO regulations, which would probably allow the use of cryptocurrencies as a "controlled quantity" payment.
The bill also fears that cryptocurrencies can be used for gray schemes in darknets, to pay bribes and black wages. It could be a valid reason why Rosfinmonitoring is eager to have an encryption-analysis functionality integrated into its financial monitoring system.
But would an instrument for tracing bitcoins make sense?
The architecture of Bitcoin allows you to find transactional links between two wallet addresses through the mechanism of the Merkle tree. You can see a whole transaction chain from point A to point Z through rich images. The forces of order can identify the culprits by denouncing the address of one of the suspects' portfolios. The Danish police, which claims to have an innovative crypto-tracking system under their belts, have arrested a local drug dealer by identifying the people behind their Bitcoin wallets.
While it is clear that Rosfinmonitoring is attempting something similar, experts believe it will not lead to anything "revolutionary".
Andreas Antonopolous, a famous Bitcoin evangelist, says:
"The question is not whether Bitcoin should be regulated, but if * can * be regulated." Reality is "No." The rest is nostalgia. "
The editor-in-chief of Satoshi.fm, Anton Merkurov, believes that finding illegal encryption transactions is like "trying to find a microbe under a microscope in a drop of water".
"If you look at the entire volume of recycled funds, the amount that is recycled through the cryptocurrency is minimal," Merkurov told the BBC. "This should not be a priority."
Overall, a measure has been taken that can be useful to some extent in capturing individual sites, servers and people involved in nefarious activities, but it could be short-sighted for a global peer-to-peer network.
Shutterstock foreground image.
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