Russia's Crypto Exchanges Share Data With Law Enforcement

Moscow’s anti-money laundering (AML) agency has issued a warning to Russians that crypto exchanges and brokers operating within the country are sharing transaction data with law enforcement agencies. This revelation came from Olga Tisen, the head of the legal department of the Federal Service for Financial Monitoring (Rosfinmonitoring), during her speech at the St. Petersburg International Legal Forum.

Tisen emphasized that the notion of anonymity in crypto transfers is a myth. Despite the lack of regulation for crypto exchanges and brokers in Russia, platform operators are disclosing all data on the owners of crypto wallets to law enforcement agencies upon request. This practice is in line with international standards, as many platforms openly state their cooperation with Russian law enforcement on their websites.

In many other countries, regulations require crypto exchanges to report suspicious transactions to AML agencies. However, in Russia, crypto exchanges operate without legal status and are largely unregulated. Tisen suggested that exchanges are proactively complying with future regulatory efforts by openly admitting to sending customer information to law enforcement and government agencies. She also noted that police do not need court orders to obtain this data, as cryptocurrency transactions are not subject to banking privacy protocols.

Rosfinmonitoring has also stated that it receives data from banks on crypto transactions and has asked the banking sector to monitor all crypto-related account activity closely. The agency plans to provide commercial banks with its blockchain analytics tool, Transparent Blockchain, to monitor personal bank accounts before the end of the year. This tool is already in use by several government agencies and overseas AML intelligence agencies, with a total of 12,000 law enforcers and regulators in Russia and former Soviet Union member states having access to it.

The Central Bank uses Transparent Blockchain to monitor Russian web traffic to major international crypto exchanges. In April, Rosfinmonitoring proposed criminalizing illegal crypto mining, a proposal backed by the Central Bank and several key ministries. This move underscores the agency's commitment to enhancing its monitoring capabilities and ensuring compliance with AML regulations.