FATF downgrades Russia for insufficient control over cryptocurrencies and virtual assets

A new report on the technical compliance of the country’s anti-money laundering system with the organization’s recommendations found that virtual assets and cryptocurrencies are insufficiently regulated in the Russian Federation.

In 2019, after a detailed audit, the FATF awarded the country the highest level of compliance. In the second half of last year, the organization studied Russia’s progress in the implementation of anti-money laundering rules, it was carried out by a subgroup of the FATF – EAG (Eurasian Group on Combating Money Laundering and Financing of Terrorism).

The FATF’s methods for monitoring suspicious transactions with virtual assets and cryptocurrencies have been included in a special recommendation from the organization (40 in total). Therefore, Russia’s rating on this point was lowered from “met” to “partially met.”

According to Neglyad, cited by RBC, several years ago the organization updated its recommendations to reduce the risks of using virtual assets, including cryptocurrencies.

The deputy director of Rosfinmonitoring clarified that the reduction indicates the need, first of all, to regulate the circulation of cryptocurrencies. We are talking about the relevant exchanges, exchangers and financial organizations.

According to the Central Bank, at the end of the third quarter of last year, Russians stored 96.9 thousand bitcoins, or 255 billion rubles, in crypto wallets.
Last fall, Binance, the largest crypto exchange, announced its departure from Russia. The company sold the business to CommEX. As of January 31, Binance stopped supporting ruble transactions.