Transparent blockchain

2023

Rosfinmonitoring told how the Transparent Blockchain system works

The Transparent Blockchain system allows you to track transactions using more than 30 cryptocurrencies. Director of Rosfinmonitoring Yuri Chikhanchin spoke about this in early November 2023.

The software product was launched by Rosfinmonitoring together with VTB on behalf of the president. It makes it possible to move along the chain - to see the sender and recipient of funds... We are creating a single database of gray addresses, now they are recorded about 19 thousand, "he said in an interview with Izvestia.

Director of Rosfinmonitoring Yuri Chikhanchin

According to Chikhanchin, by the beginning of November 2023, Transparent Blockchain was already launched in a number of Central Asian countries, Arab, African and Latin American states are showing interest in it. The head of Rosfinmonitoring added that the same system allows banks to conduct crypto compliance. Rosfinmonitoring has already worked on the methodology for it together with the Bank of Russia, and financial organizations are beginning to use it in practical work, he noted, adding that VTB Bank provided assistance in developing the service.

The head of the Binance exchange in Russia and the CIS, Vladimir Smerkis, in a conversation with Kommersant, explained that getting the name and surname of the sender, if the address of the cryptocurrency wallet is known, is possible only at the request of law enforcement agencies.

The second point is when a certain number of cryptocurrency addresses are marked by scammers. The system collects data, allocates bad addresses and allows government agencies from all over the world that are connected to the system to exchange this kind of data, he stressed.

According to Mikhail Uspensky, a member of the expert council of the working group on cryptocurrencies of the State Duma, many accounts are registered on dummy persons. There are cases when you can really trace the path of digital currencies to some kind of exchange, but by all other signs it becomes clear that this is not a real person, he noted.

The maximum that can be squeezed out of this situation by law enforcement officers, try to establish the connections of a dummy person with real perpetrators of fraudulent actions. But these chains, as a rule, are always built remotely, through the darknet, - said Uspensky.[1]

Help in solving contract murder paid for by cryptocurrency

Rosfinmonitoring's Transparent Blockchain service helped solve a contract murder paid for by cryptocurrency. State Secretary - Deputy Director of the department German Neglyad spoke about this at the end of July 2023.

I must say that the Transparent Blockchain service helps us and law enforcement agencies to identify and analyze cryptocurrency transactions. There are already several criminal cases brought to court, during the investigation of which such analysis was used. One of the resonant solved crimes is a contract murder paid for by cryptocurrency, he said in a conversation with TASS on the sidelines of the Second Russia-Africa Summit.[2]

Rosfinmonitoring service "Transparent Blockchain" helped solve a contract murder paid for by cryptocurrency

According to Neglyad, attackers are calculated by cryptocurrency for narcotic drugs, it is also a tool for laundering criminal proceeds obtained as a result of the implementation of fraudulent schemes, the activities of financial pyramids and other criminal acts. The facts of calculating cryptocurrency for terrorist and extremist acts were recorded, he added.

Earlier in July 2023, German Neglyad, in an interview with Rossiyskaya Gazeta, noted that the risk of laundering criminal proceeds through cryptocurrencies is high. This is primarily the laundering of proceeds from drug trafficking, fraud, financial pyramids, as well as the use of this tool for terrorist, extremist purposes.

The financial sector analyzes transactions in traditional, so-called fiat currency, which are associated with the exchange for cryptocurrency in the part in which it can see them. The Bank of Russia is very active here, focusing financial institutions on such operations. As a result, in the last [2022] year alone, we received from banks about 70 thousand reports of suspicious transactions, which, presumably, are associated with the illegal circulation of digital currency, - said a representative of Rosfinmonitoring.

The head of Rosfinmonitoring reported to Putin on the launch of a "transparent blockchain" in law enforcement agencies

On March 9, 2023, the head of the Federal Financial Monitoring Service (Rosfinmonitoring) Yuri Chikhanchin, at a meeting with President RFVladimir Putin, spoke about the launch of a "transparent blockchain" in Russian law enforcement agencies.

We have improved it: if a year ago we saw one currency -, cryptocurrency bitcoin- today we already have more than 20 currencies. Now testing is underway in,, MINISTRY OF INTERNAL AFFAIRS, and FSB Investigative Committee a number of CIS countries have asked us for this product in order to launch it at home, "Chikhanchin said (quoted by" ").To Interfax

The head of Rosfinmonitoring Yuri Chikhanchin at a meeting with Russian President Vladimir Putin

The head of Rosfinmonitoring stressed that the "transparent blockchain" helped, together with law enforcement agencies and colleagues from financial intelligence from abroad, close the Hydra Internet site, which specialized to trade drugs in weapons and. money laundering

All people are arrested today. And also revealed the fact of providing [funds] through the crypt of one Ukrainian terrorist nationalist organization. This work is also now going with the FSB, - concluded Yuri Chikhanchin.

He also reported to Putin that by March 9, 2023, thousands of participants in operations with cryptocurrencies were being monitored by the financial intelligence of the Russian Federation, about 120 investigations were carried out, 60 criminal cases were initiated.

Unfortunately, I must say that the volume of cryptocurrency use is growing. We still have a certain unsettled so far today. In particular, we have more than 25 thousand participants in these operations on monitoring. About 10 financial organizations that assist them have been identified. The cryptocurrency turnover today is somewhere, we believe, more than 630 thousand bitcoins, - said the head of Rosfinmonitoring.[3]

Investigators will check the contract for the supply of the Ministry of Internal Affairs devices for the analysis of smartphones for 25.8 million rubles

On January 25, 2023, it became known about the inspection carried out by the Main Investigation Department of the Investigative Committee of the Russian Federation in Moscow in relation to the state contract for the supply of hardware and software systems for the collection, research and analysis of data from mobile devices. Read more here.

2021: Launch of the Transparent Blockchain cryptocurrency transaction tracking system

On February 19, 2021, it became known about the creation by the Federal Financial Monitoring Service (Rosfinmonitoring) of a service called Transparent Blockchain, which allows tracking cryptocurrency transactions of Russians.

The head of the department, Yuri Chikhanchin, spoke about the launch of this system at a meeting with Russian President Vladimir Putin. Her transcript is given by the Kremlin website. According to Chikhanchin, Transparent Blockchain will allow "to see all movements with cryptocurrency, that is, attempts to hide behind cryptocurrency." He also noted that the service has already begun work, as a result of which "there are criminal cases."

Meeting of Vladimir Putin with the head of Rosfinmonitoring Yuri Chikhanchin

The head of Rosfinmonitoring said that the department works in the field of monitoring cryptocurrency transactions with the assistance of colleagues from other countries, including Finland, Luxembourg, Liechtenstein, Belarus and Malta. Control over this project is carried out by the government with the participation of the Ministry of Digital Development.

Deputy General Director of Zecurion Alexander Kovalev, in a conversation with Kommersant, noted that in order to determine the ultimate owners of cryptocurrency, Rosfinmonitoring and law enforcement officers need at least to know who to follow. However, even if some operations can be classified as suspicious, it is still almost impossible to calculate the beneficiary.

It is quite problematic to identify a specific person only using a blockchain analyzer. Naturally, if we are talking about a situation where, for example, we know the wallets of some bad people, that is, we have a starting point, then in principle, yes, you can understand how money came to these wallets, or to whom they were transferred, "Kovalev explained.

2020: Prototype of the Transparent Blockchain system

On August 11, 2020, it became known about the development by Rosfinmonitoring of a system for analyzing cryptocurrency operations using artificial intelligence. The project was called "Transparent Blockchain." The agency proposes to include it in the federal project "Artificial Intelligence."

As RBC writes with reference to a letter from Rosfinmonitoring, Deputy Head of the Ministry of Telecom and Mass Communications Maxim Parshin, by August 11, 2020, in cooperation with the Lebedev Physical Institute, a prototype of the system has been developed, which has been tested in the field of countering drug trafficking. The implementation of the project is estimated at 760 million rubles: 440 million rubles in 2021, 230 million rubles in 2022, 90 million rubles in 2023.

Rosfinmonitoring plans to use the new system to monitor and analyze the movement of digital assets, as well as conduct investigations into the illegal circulation of bitcoins and other cryptocurrencies. It is argued that with the help of the project it will be possible to partially remove anonymity.

Rosfinmonitoring develops an AI system for analyzing cryptocurrency transactions

The system will also allow scanning the Internet to detect images with fundraising details for signs of financing terrorist activities and to identify messages related to money laundering and terrorist financing. Users of the system can be authorities, the Central Bank and financial organizations, Rosfinmonitoring notes.

Such a service can be most effective after accumulating a large amount of normal transactions on financial operations in order to train algorithms for extracting abnormal transactions with its help, says Viktor Smirnov, head of Digital Processes at CROC. According to him, the testing of the system within the framework of the Transparent Blockchain project was successful and proved that there would be no problems in the technical part of the project.^[4]

By August 2020, the prototype system was already developed and tested in the field of countering drug trafficking. The service reported interest in the prototype from the Ministry of Internal Affairs and financial intelligence of a number of countries.^{[5] [6]}

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