All new participants in the Russian crypto market will be required to conduct full client identification, which means identifying information about client and their representatives, beneficiaries.
This was stated by Vlada Korchagina, Advisor to the Director of the Federal Financial Monitoring Service, at the "Digital Assets in Russia" forum, as reported by a Frank Media correspondent.
These regulations will apply to brokers and trust managers currently operating in the capital market. Currently, they have the right to collect limited client information and not identify their beneficiaries and beneficial owners, according to Korchagina. If they decide to conduct transactions with cryptocurrency and digital rights, they will have to conduct further due diligence on their clients, she concluded. "We fully understand that this (collecting additional client information – FM) is a new set of responsibilities and will require some adaptation. Therefore, both digital depositories and crypto exchanges will be given the opportunity to delegate the identification process to other financial institutions, in particular banks and professional securities market participants," a Rosfinmonitoring representative clarified.
Furthermore, five new types of transactions involving digital currency and digital rights will be subject to mandatory oversight. For example, market participants will be required to notify Rosfinmonitoring of transactions exceeding 1 million rubles. Furthermore, if a digital depository has suspicions regarding the origin of a client's income, the client may be denied a digital account agreement.
"Furthermore, an important detail is the travel rule, that is, the informational support for transfers that I mentioned earlier." The digital depository will be fully integrated into this system and will be required to accompany transfers of digital currency and digital rights with information about both the sender of the digital currency, digital rights, and the recipient. In addition to the digital depositories themselves, brokers who directly accept client instructions for the transaction will also be required to provide this information," Korchagina clarified.
Finally, the Bank of Russia will share data from its "Know Your Customer" anti-money laundering platform with digital depositories. Thus, the regulator will provide digital depositories with information on the assessment of legal entity clients, and digital depositories will be required to take action against high-risk entities.
The Investigative Committee insisted on mandatory identification of cryptocurrency holders back in 2022. Its head, Alexander Bastrykin, stated that the adoption of the law on digital financial assets in 2020 could raise the risk of using digital currency for criminal purposes, such as financing terrorism. "Therefore, the circulation of digital currency requires further legal regulation—first and foremost, mandatory identification of users of such currency is necessary," Bastrykin noted in an interview with Rossiyskaya Gazeta.