Russia Says to Update Cryptocurrency Laws

Russia Says to Update Cryptocurrencies Laws

For the first time in four years, the volume of cryptocurrency flows on darknet markets – involving illegal drug and arms trafficking, remittance and transfer of illicit funds – has doubled, a new report says. So Russia has been updating its cryptocurrencies bribery and Anti-Money Laundering laws to help its burgeoning digital economy.

Bitcoin (BTC) hit the headlines in Russia after it emerged that the Russian Federal Security Service, or FSB — the Soviet KGB’s successor agency — had been trying to extract a $1 million BTC bribe from a media mogul last spring.

The Russian Supreme Court made it clear at the end of 2019 that “digital rights” — a term used in the country’s law to mean cryptocurrencies — can be used to facilitate illegal activities such as bribes, in the same way as fiat currency, property and other valuable assets. The Court stated that at the time of the bribe, experts should be valuing such cryptocurrency bribes.

However, Russian government officials and members of their family would only need to disclose their illegal income from cryptocurrency when exchanged for traditional money as “other income,” according to a 2018 guidance issued by the Russian Ministry of Labor.

Cryptocurrency Hacking and Money Laundering

The FSB has also allegedly been involved in the disappearance of $450 million in Wex cryptocurrency, one of the biggest online exchanges in the world. Wex was an offshoot of BTC-e, a crypto-currency exchange based in Bulgaria that allegedly handled Bitcoin tracing back to a hacking unit of Russian military intelligence.

BTC-e was eventually shut down in 2017 by the United States Treasury Department Financial Crimes Enforcement Network for the laundering of $4 billion in cryptocurrencies in a first-of-its-kind multi-jurisdictional, synchronized law enforcement operation.

Similarly, a Russian hacker virus was found on employee computers at the Coincheck exchange in Tokyo, which was hacked in January 2018, resulting in the loss of 500 million NEM tokens worth around $530 million, the largest ever theft from a cryptocurrency exchange.

The Russian Supreme Court ruled theft of cryptocurrency as a criminal offence last year, paving the way for new regulations. The court further directed Russia’s Central Bank to make amendments to the AML laws that would cover cryptocurrencies.

Russia has been updating its cryptocurrencies legislation in a synchronized fashion with the Eurasian Economic Union and BRICS nations to put the brakes on promoting cryptocurrencies-linked financial services while continuing to explore ways to develop a fintech strategy to foster innovation in cloud-based mobile digital payment solutions.

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Abdulhay Mahmoud 414 Articles
Abdulhay Mahmoud is a creative writer with over 15 years of experience in journalism, translation, and investor relations. He has B.A in English and Literature from a reputable University. He recently became a contributor at Cryptolydian.com to fulfill his thirst in reporting digital coins and blockchain-related news, an interest was built over the years.