Russian Central Bank Wants Banks to Flag Crypto Deals as ‘Suspicious’

Russia’s Central Bank has unveiled a plan to ask banks in the country to flag account holders who deal with cryptoassets as “suspicious.”

Per news outlet RBC, the Central Bank has submitted a request to make amendments to the key 375-P protocol, a document that outlines the way that banks should combat money laundering.

Although the Central Bank’s proposal would need to be approved by the government, it will nonetheless send shivers up the spines of many members of the country’s crypto community.

The protocol has not been amended since 2012, but the ramifications could be extensive: banks can use the anti-money laundering regulations to identify “suspicious activity.” They can then use this to make decisions on whether to suspend or decline a transaction and in certain cases, even close or freeze accounts.

Meanwhile, as reported in December 2009, the country’s Ministry of Internal Affairs confirmed that it is cooperating with the Russian Supreme Court and a number of other federal institutions to prepare draft legislation that would allow the authorities to confiscate cryptoasset, with plans to submit a proposal by the end of 2021.

But there does appear to be a silver lining for Russian crypto enthusiasts. The Central Bank, notoriously crypto-skeptic on all matters until very recently, has approved a blockchain-powered metals tokenization plan.

RBC also reports that the Central Bank has given its blessing to a proposal from Norilsk Nickel (Nornickel), a metals company that wants to introduce a platform for trading tokenized metals commodities.

Nornickel, which is controlled by its billionaire chief Vladimir Potanin, claims it is “the world’s largest producer of palladium, and one of the largest producers of nickel, platinum, and copper.”

The Nornickel plan, which would see it tokenize nickel and palladium holdings, has won the support of the bank’s fintech department.

The media outlet says that the project could be given the green light after the nation’s much-anticipated crypto and blockchain legislation is approved by parliament in the upcoming spring session.