New Russian Tech Monitors Crypto to Prevent Terrorism Funding

Russia takes the prevention-is-better-than-cure approach on creating a tool that tracks crypto in order to put an end to terroristic transactions and money laundering.

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The Russian Federal Financial Monitoring Service (RFFMS) worked out a contract with Moscow-based Institute for Information Security and Analysis (SPI) to create an analytical tool that can trace crypto transactions, particularly Bitcoin (BTC) negotiations, BBC News Russia reported on August 29.

Tool To Track Crypto

In efforts to prevent terrorism backing and confront fraud schemes, the new application will be included in a compact monitoring system for the organization, according to the state’s website. The tool is counted upon to unite scattered information on fraud and find connections between them by the end of 2018.

According to BBC Russia, SPI had previously developed a software called iRule. The Monitoring Service as well as Russian security forces, credit organizations and insurance companies had reportedly used the software. The contract was worth 195.5 million rubles (about $2.9 million) as stated in public documents.

Not only can the new tool track digital wallets, it can also find a specific person’s name, cellphone number, bank account, credit card, and the number of the electronic wallet. It’s reach extends to include data on cryptocurrency and Bitcoin transactions.

Russia’s Critical Stance Towards Crypto

The Monitoring Office is known for consistently criticizing cryptocurrencies. In a press release far back in 2014, the Office stated that even the mere use of crypto could be grounds for recognizing transactions illegal.

Vladimir Putin’s ex-adviser and head of the Chamber of Commerce and Industry of the Russian Federation Herman Klimenko blames the anonymity of cryptocurrencies.

He justified:

“Crypto-currency is used for gray schemes. For example, in the Darkweb to purchase weapons, drugs or violent videos. Lawmakers in many countries are concerned about this phenomenon which was confirmed by the analysis that we conducted on behalf of the president.”

Impenetrable For Controlling Bodies

Despite the Office’s steps in restricting free crypto transactions, founder and host of the first crypto radio Anton Merkurov thinks otherwise. He believes that this can lead to the opposite effect wherein cryptocurrencies that provides statistics on transactions will become impenetrable for the controlling bodies.

Merkurov explained:

“If you look at the entire volume of laundered funds, the share that is laundered through the crypto currency is very small. The authorities are trying to find a microbe under a microscope in a drop of water. This should not be a priority, and most importantly, if they start pressing there – opposition will begin.”

To prevent that from happening, the Russian State Duma’s Committee for Legislative Work announced in May that it will support the first reading of a scheme that pushes to establish norms for the digital economy.

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