Federal authorities in Russia are moving forward with a plan to closely monitor cryptocurrency activity for illicit transactions and deanonymize crypto users’ identities.
The Russian Federal Financial Monitoring Service, also known as Rosfinmonitoring, has selected a contractor for developing a platform for tracking cryptocurrency activity. According to data from Russia’s state procurement website, the country will allocate 14.7 million rubles ($200,000 USD) from its budget to create a “module for monitoring and analyzing cryptocurrency transactions” using Bitcoin (BTC).
According to the official data, the procurement contract was granted to a company referred to as RCO, which is reportedly indirectly backed by the Russian largest bank, Sber, formerly known as Sberbank.
Under the contract’s documentation, RCO will be tasked with building a monitoring tool for tracking the movement of digital financial assets and maintaining a database of cryptocurrency wallets involved in illicit activities, as well as monitoring crypto users’ behavior in order to identify them.
The platform will also be designed to compile detailed profiles of crypto users and assess their role in the economic activity as well as identify the likelihood of their participation in illegal activities. According to Rosfinmonitoring, Russia’s upcoming crypto tracking tool would improve the efficiency of primary financial monitoring and compliance, as well as ensure the safety of budget funds.
This latest development marks another milestone in Russia’s efforts to track cryptocurrency transactions after Rosfinmonitoring announced the “Transparent Blockchain” initiative aiming to track the movement of digital financial assets a year ago.
As previously reported, the authority planned to “partially reduce the anonymity” of transitions involving major digital assets like Bitcoin and Ether (ETH), as well as privacy-oriented cryptocurrencies like Monero (XMR). Rosfinmonitoring originally disclosed plans to track crypto transitions back in August 2018.