A well-placed Russian official has called for global cryptocurrency standards to prevent money laundering and provide legitimacy to the industry while enforcing broad recommendations to control the sector, reported local news outlet Izvestia on October 29, 2018.
FATF Asked to Act Fast
Pavel Livadny, Vice President of the Federal Financial Monitoring Service of the Russian Federation (Rosfinmonitoring), has utilized the Financial Action Task Force’s (FATF) recommendations to control, regulate, scrutinize, and assess financial markets related to cryptocurrencies and its associated businesses, such as wallets, exchanges, and custody providers.
The FATF is a 1989-founded intergovernmental body that primarily works towards evading money laundering and develops global standards to combat terrorist financing. Currently, 37 member-countries make up the Paris-headquartered organization, and 31 other economies “participate and observe” in FATF’s work without proposing operational decisions.
Livadny believes the authority must further regulate the burgeoning cryptocurrency sector, which is seeing fast growth in both institutional and governmental developments in 2018 despite the year’s notorious and prolonged bear market.
As part of recommendations, the Russian official revealed all local token issuers, exchanges, and crypto-businesses are required to register with Rosfinmonitoring to continue their operations, in addition to following strict guidelines set down by the Russian watchdog. Fortunately, the rules are aimed at businesses with a considerable income, rather than startups with no revenues to show.
Temporary Moves until Permanent Bills
To increase investor credibility and transparency in the cryptocurrency industry, businesses with over 600,000 rubles, or approximately $9,000, are required to register with Rosfinmonitoring. However, the dictum exists until proper Russian legislations are introduced to govern the sector, post which the new laws would take precedence.
Livadny notes that token circulation and market liquidity will not be affected gravely, while their issuance and usage will be duly monitored. In addition, strict Anti-Money Laundering (AML) standards will be enforced upon crypto businesses in line with the FAFT’s recommendations, which allow cryptocurrencies to be circulated, exchanged, and transacted digitally for payments and investments.
Meanwhile, Russia remains in a gray area for cryptocurrency regulations. The country continues to delay its regulatory framework for digital assets, which were expected in July 2018 and has failed to pass adequate tax laws.
The much awaited “On Digital Assets” bill, requested by Prime Minister Vladimir Putin in January 2018, continues to be a no-show with authorities citing the “complexity” of subject matter and “lack of consensus” amongst parliament members as reasons for the delay.