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Russia: Gov’t Hopes to Monitor Crypto Transactions

Tim Alper
Last updated: | 1 min read

Russia’s Federal Financial Monitoring Service (also known as Rosfinmonitoring) – a government agency tasked with fighting financial fraud and terrorist funding – will attempt to track the cryptocurrency transactions of suspected Russian terrorists, drug traffickers and money launderers.

Source: iStock/LaraBelova

The agency appears to have commissioned a developer to create a software solution that allows it to monitor suspects’ cryptocurrency wallets in the same way governments can access phone records and bank account activities.

Per the BBC and Russian media outlet Moika78, Rosfinmonitoring hopes to have the solution up and running by the end of the year, and has been planning to implement it since March this year. Moika78 says it is unclear as to whether the solution, which per government documents claims to be capable of tracing Bitcoin activity, will also allow the agency to monitor other tokens.

The BBC claims that documents show that a Moscow-based intelligence software provider named SPI is the solution’s developer. SPI appears to have been paid some USD 286,000 by the state for its services in April.

SPI is the developer of data mining and crime-fighting software such as iRule, VisuaLinks, i2, Watson and CrimeLink, and has previously supplied solutions to the Federal Security Service (the post-Soviet successor to the KGB), Russia’s Central Bank and major Russian commercial banks such as Sberbank and VTB Bank.

Most blockchain advocates believe that the widespread adoption of this innovative new technology will lead to a freer, fairer and more transparent society where peer-to-peer transactions will be the norm. However, there is also a flipside to the blockchain that has not yet been widely discussed in the media.

Blockchain technology could also be misused by malicious governments to foster authoritarian regimes, as reported. It could track all financial transactions through a sovereign digital currency on a permissioned ledger, use blockchain-based digital identities to track citizen’s digital footprints, create an immutable social credit scoring system, and store falsified records on a public sector blockchain.