Russia Eyes Cryptocurrency Transfer Blocks Amid Banking Suspicions

Russian lawmakers have revised a draft law on digital currencies and rights for its second reading. The proposed changes would block cryptocurrency transfers if a bank suspects the recipient of organizing digital currency circulation without a legal market participant status in Russia.

The initial draft of the bill suggested maintaining two registries: one for entities bypassing the legal market, and another for foreign payment providers servicing those listed in the first registry. However, these lists have been removed from the revised version.

Instead, the concept of an 'unauthorized recipient' has been introduced, which refers to a recipient whom a bank suspects of organizing digital currency circulation without the status of a legal market participant in Russia. Banks will report information about such recipients to the Central Bank, and the regulator can only provide data on foreign payment service providers that facilitate transfers to them.

The bill does not define suspicion criteria, leaving it to each financial institution to establish these criteria independently in their internal documents.