Know your crypto client

2024: Product Announcement

The Bank of Russia and Rosfinmonitoring launched a service to identify the connection between fiat and cryptocurrency operations. The development was called "Know Your Crypto Client," said Ilya Bushmelev, director of project portfolio management at Innotech (partner of the Transparent Blockchain platform from Rosfinmonitoring) at the end of April 2024.

The challenge we face is identifying the link between fiat and crypto operations. Credit institutions currently have all the opportunities to work with fiat, but cryptocurrency transactions are still considered separately, "he said (quote from RBC; the article was published on April 25, 2024).

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Freepik

By the end of April 2024, the Know Your Crypto Client service is used in test mode by five banks. According to the results of the pilot project (testing will last until the end of May 2024), a basic understanding of the necessary actions and tools for credit institutions should be formed in terms of crypto compliance, the Know Your Crypto Client procedure and Know Your Crypto Transaction, Bushmelev explained.

According to the director of the Rosfinmonitoring department, Alexander Kuryanov, market participants by the end of April 2024 are testing "scenarios for the connection of the client's fiat operations with his operations in the non-fiat circuit."

On this basis, it is possible to form some methodological approaches, recommendations, which in principle can be called the word "regulatory," he clarified.

According to RBC, insufficient regulation of the cryptocurrency sector influenced Russia's position in the ranking of the International Group Against Money Laundering. According to a study published in February 2024, the Russian Federation faced a decrease in indicators, which reflects the country's results in controlling operations with virtual assets and cryptocurrencies.^[1]

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