Russia’s central bank to combat illegal crypto OTC services with new surveillance platform: report
Russia’s central bank is set to develop a new platform that would help it crack down on illegal crypto OTC services and suspicious financial activities.
The central bank of Russia is reportedly planning to create a new platform aimed at making it more difficult for shadow businesses to misuse banking services for illegal activities, including crypto-to-fiat over-the-counter platforms that bypass KYC procedures.
The Bank of Russia is collaborating with the country’s financial watchdog Rosfinmonitoring, banks, and local experts to create a system that would help identify and block customers involved in illegal financial transactions, Russia’s news outlet RBC reports, citing Bogdan Shablya, head of the financial monitoring and currency control service at the Bank of Russia.
The platform will reportedly allow the central bank to share information about suspicious activities with financial lenders, helping them prevent illegal financial dealings. The focus is on individuals — also known as “droppers” — who offer their bank cards for money laundering or illegal activities, including transactions for drugs, online casinos, crypto exchanges/OTC services, or pirated websites.
Centralized database
Shablya explained that the central bank has already set up online monitoring systems with certain banks to track individual transactions. However, at the moment, it can only share information about “droppers” with the banks where these clients hold accounts. Since bad actors often open accounts in multiple banks, there is a need to centralize data and “share information with all credit institutions,” Shablya added.
At the moment, banks do not have the authority to refuse a person an account based solely on information suggesting they may be involved in drop activities. The most a bank can currently do is open an account and block remote banking services for that account. However, these decisions are often made after suspicious transactions have already occurred, Shablya explained.
The timeline for the platform’s launch is unclear, as Shablya mentioned that the issue “is still under development” and emphasized that the central bank aims to find an “acceptable solution” that addresses the problem without creating social tension or affecting honest citizens.
