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Russia doubles down on efforts to identify, profile crypto-users

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According to recent reports, the Federal Financial Monitoring Service of Russia, known as Rosfinmonitoring, is going to start tracking cryptocurrency transactions and wallets linked with possible criminal activities and terrorism.

The agency has already raked in RCO, a major Russian information technology company, for the purpose. It won a contract to develop the proprietary tool for almost $200,000, while the initially quoted amount was around $270,000.

As per the auction page, apart from monitoring addresses, the proposed tool will also keep a database of cryptocurrency wallets and monitor the behavior of market participants. The purpose of the tool is,

“… identify them, compile profiles of participants and assess their role in economic activity, as well as identify the likelihood of their participation in illegal activities.”

The goal of this initiative is to ensure transactions adhere to the rules of legal compliance. It also intends to increase transparency within the crypto-ecosystem.

Russia has been looking for ways to track cryptocurrency transactions since early 2018. At the time, the Rosfinmonitoring had initiated an auction worth $2.8 million to build such a system. In 2020, the agency proposed to create an artificial intelligence-based system for blockchain analysis to track, monitor illicit transactions. It is, however, unclear what transpired with these proposals.

In fact, a law is being drafted by Russian legislators to allow the confiscation of crypto-assets that are proceeds from crime. According to lawmakers, digital assets are being increasingly used by criminals, especially for corruption and paying bribes.

Russia isn’t alone, however. Recently, the European Union proposed to ban anonymous cryptocurrency transactions in a bid to fight money laundering and terrorism financing.

In the U.S., the Biden administration is cracking down on cybercrime post the Colonial Pipeline ransomware attack.


Anjali is a full-time journalist at AMBCrypto. With a strong background in humanities, her personal inclination lies towards the political and socio-economic aspects of the crypto-sphere
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