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How realistic is Russia's Bitcoin, Ethereum and Monero monitoring plan?


Russian experts have been debating the feasibility of a new cryptocurrency monitoring platform that could allow Moscow to partially anonymize bitcoin (BTC), ethereum (ETH) and even privacy tokens like monero (XMR).

How I know recently reported, a local news outlet said it has seen evidence that the Service Federal Financial Monitoring (known as Rosfinmonitoring), a government agency charged with countering money laundering and terrorist financing, has developed a prototype for a research strategy "Partial" powered by AI anonymization platform. The platform would reportedly allow officials to find out who in Russia is sending BTC, ETH, and more to whom.

The agency said it needs a budget commitment of more than $ 10 million to launch the platform.

According a report from Izvestia, Dmitry Zakharov, executive director of the Moscow Digital School, said the Rosfin oversight project could work "technically" but faced "certain difficulties" due to the fact that most criminals are so careful to cover their tracks.

He stated:

"Criminals divide transactions into small transactions made in various directions before sending them to cryptocurrency exchanges."

To effectively track cryptocurrencies in Russia, Zakharov said, "all market participants would have to act together by marking tokens and freezing accounts on exchanges."

What's more, for true anonymity, most privacy lovers still prefer to do business with cash.

The news outlet also cites a lawyer who opined that any monitoring platform Rosfinmonitoring has in mind would likely be ineffective at tracking individual users and unique transactions. However, its interface powered by artificial intelligence and machine learning could help you identify illegal and unregistered cryptocurrency exchanges and brokers.

Meanwhile, Alexander Butmanov, an executive at the blockchain firm DTI , he told Kommersant believed that $ 10 million would be more than enough to make the project a reality, and opined that the running costs would likely be "a couple of million dollars per year" to pay for staff and server costs.

However, he hinted that if the agency's real target was organized crime and terrorism, it was barking up the wrong tree with cryptocurrency monitoring software.


"The percentage of terrorist financing that is done using cryptocurrencies in Russia is practically zero, and only a small percentage of all money laundered in Russia is done using crypto."

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