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Moscow Not Planning to Ban Russians From Buying Crypto Abroad

13/10/2021 by Idelto Editor

Russia is not going to follow China’s course and does not plan to ban its citizens from purchasing cryptocurrency on foreign exchanges, a high-ranking government official has indicated. Russians will not be able to pay with digital coins in their own country but are free to use crypto wallets beyond its borders.

Russians Can Purchase Cryptocurrencies on Foreign Exchanges

Unlike the Chinese government, authorities in Moscow do not intend to impose restrictions on the purchase of cryptocurrency on digital asset exchanges based abroad, a statement by Russia’s deputy minister of finance Alexey Moiseev has revealed. Speaking to reporters this week, he noted that settlements in cryptocurrency are prohibited in the country but explained:

At the same time, citizens can buy [cryptocurrencies] and use wallets outside the Russian Federation. It will remain so, I think. There are no plans to change anything yet.

On Tuesday, during a lecture devoted to the digitalization of financial markets at the Moscow State Institute of International Relations (MGIMO), Moiseev reiterated that Russia will not allow cryptocurrency to be used as a means of payment within the country. Quoted by Interfax, the government official said:

The position now is to ban operations with cryptocurrencies on the territory of the Russian Federation.

Answering questions from students, he pointed out that allowing crypto payments could lead to loss of control over money supply and insisted the matter comes down to financial sovereignty. Nevertheless, Alexey Moiseev added that regardless of the ban, Russians can have a cryptocurrency wallet outside the country.

The deputy finance minister also emphasized that many new financial terms, such as digital currency and blockchain information, will have to be defined in Russia’s Civil Code and other relevant laws. He further elaborated:

Blockchain will obviously occupy its own niche and will be used where equal rights are needed.

However, Moiseev’s comments come after last week’s statement by the head of the parliamentary Financial Market Committee, Anatoly Aksakov, who revealed that Russian lawmakers are considering legal restrictions on the amount of money non-qualified investors will be allowed to put into crypto assets. Aksakov believes the measures are needed to protect private investors in Russia as cryptocurrencies attract billions of dollars around the world.

Do you think Russia will maintain its current policy regarding crypto purchases on foreign exchanges? Tell us in the comments section below.

Scammers Offer Free Bitcoin on Hacked Government Site in Russia as Crypto Fraud Surges

05/09/2021 by Idelto Editor

Unknown scammers have organized a fake bitcoin giveaway through a Russian government website they hacked. The news of the attack comes after a recent report revealed that damages from crypto-related fraud in Russia have reached $30 million in value in the first half of this year.

Regional Government Website in Russia Hacked by Scammers

The main website of the local administration in the Russian city of Ryazan, around 200 km southeast of Moscow, has been targeted by hackers twice in a single day, Rzn.info reported quoted by the crypto news outlet Forklog. The unidentified attackers published an ad offering cryptocurrency to those who download a special application.

The scammers initially promised to send 0.025 ВТС to every visitor who installed the app. They later changed the offer to a prize of $1,000 in bitcoin for each of five randomly chosen participants in what was advertised as the “Ryazani online lottery.” Both ads have already disappeared from the mayoral site but the local news outlet published a screenshot of one of the ads.

Crypto Fraud in Russia Valued at $30 Million This Year

The volume of cryptocurrency-related fraud around the world has increased significantly in 2021. In the first half of the year, losses amounted to an estimated $1.5 billion, which is two to three times more than the total registered during the same period of last year, experts from the IT security company Zecurion told the Russian daily Izvestia.

According to the report published earlier this week, the Russian Federation accounts for 2% of the global amount – some $30 million, or almost 2.2 billion rubles. Analysts believe the main reasons for the spike stem from the growing exposure of users to digital assets as well as the desire to make quick profits in an expanding sector with limited regulations, amid volatility in the traditional financial markets. They also expect crypto fraud to continue to rise this year leading up to a 15% annual increase.

In July, the Central Bank of Russia (CBR) announced it had identified 146 financial pyramid schemes in the first six months of the year. The number is 1.5 times higher in comparison with the same period of 2020. Fraudsters often lure people with weak financial literacy into investment scams linked to cryptocurrencies or crypto mining, the regulator said. The CBR attributed the surge to the increasing activity of “unfair market participants” and investment demand in Russia.

Blockchain forensics firm Chainalysis revealed this week that crypto addresses based in Eastern Europe have sent $815 million of digital currency to scams in a single year. Over half of the money transferred to scam addresses from the region went to the Russia-based Ponzi scheme Finiko. The pyramid was targeting crypto holders in Russian-speaking populations in the former Soviet space with promises of 30% monthly returns before it collapsed in July.

Do you agree with experts’ expectations that crypto-related fraud will continue to increase this year? Share your thoughts on the subject in the comments section below.

Russia to Track Crypto Transactions With Help From Sberbank-Owned Company

05/08/2021 by Idelto Editor

The Federal Financial Monitoring Service of Russia is going to start tracking cryptocurrency transactions. The agency has already selected a contractor to develop the platform. The entity is affiliated with one of Russia’s largest financial institutions, Sberbank.

Rosfinmonitoring to Keep Record of Cryptocurrency Wallets Used for Illicit Purposes

Russia’s financial watchdog, Rosfinmonitoring, has selected a contractor for the building of a platform that will be used to track cryptocurrency transactions in the country. The company that won the tender, RCO, is managed by Rambler Internet Holding which is affiliated with the banking giant Sberbank, Russian crypto media reported.

The Unified Information System in the Field of Procurement portal shows that the project has a price tag of an estimated 14.7 million rubles (over $200,000). The money will be spent to enable the regulator to closely monitor illegal transactions involving cryptocurrencies. According to Rosfinmonitoring, the initiative aims to ensure compliance with the law and increase transparency in the crypto industry.

The platform will be expected to perform multiple tasks such as tracking flows of digital financial assets as well as identifying and profiling participants in the crypto market to assess their economic roles and behavior. RCO will have to create and maintain a database of cryptocurrency wallets associated with illicit activities and financing of terrorism.

Russia to Identify Crypto Users Suspected of Criminal Activities

Unlike other tools that analyze crypto transactions, the new platform should also reveal the identities of crypto users suspected of involvement in illegal activities, said Moscow Digital School associate Efim Kazantsev, quoted by Bits.media. However, he noted that with closed blockchains, the disclosure of user data will depend on the networks. Regulators and law enforcement agencies will probably be able to access this information only as part of ongoing investigations, Kazantsev elaborated.

The processing of cryptocurrency transactions also involves recording data outside the blockchain. For example, with internet providers, explained Maria Stankevich, director of development at crypto exchange Exmo. Using this type of information, an IP address can be established and a sender identified.

It is possible to de-anonymize transaction participants even on confidential blockchains such as Monero and Zcash, added Nikita Zuborev, senior analyst at the Russian exchange aggregator Bestchange.ru. He is convinced the latest big data analytics tools would be able to handle that.

Bitcoin (BTC), ethereum (ETH), and monero (XMR) are the most popular cryptocurrencies among criminals, according to Rosfinmonitoring. Earlier this year, it was announced that the agency had developed a crypto tracking system called ‘Transparent Blockchain.’ The motives for building a new one now remain unclear.

Do you think Russia will be able to track and identify crypto transactions and users? Share your thoughts on the subject in the comments section below.

Joe Biden Directs US Intelligence to Investigate Ransomware Attack Against Florida IT Firm

05/07/2021 by Idelto Editor

Joe Biden wants to crackdown on ransomware according to statements he made on Friday, after hackers hijacked software from a Miami-based IT supplier called Kaseya. Hundreds of American businesses were affected by the breach as the attackers encrypted the files of some 200 clients. Biden said on Friday that he’s ordered an investigation into the exploited Florida-based IT infrastructure.

Biden Directs US Intelligence Agencies to Look Into the Kaseya Ransomware Attack

Following the Colonial Pipeline ransomware attack, this past week an IT supplier called Kaseya was breached and the company’s software management tool called VSA was exploited. This attack affected a great number of Kaseya clients on Friday and suspicions of Russian gang involvement were sparked by investigators. Huntress, a security company, said that the company believes Russians were involved and blames a gang called Revil. The Revil ransomware gange is suspected of attacking the meatpacking company JBS last month as well.

American president Joe Biden remarked during a public appearance that he had directed U.S. intelligence agencies to investigate the matter and that the U.S. would do something if Russia was found to be behind it. Last month, Biden met with Russian president Vladimir Putin and told the leader that if ransomware attacks continued and were found to be from Russia there would be consequences. However, Biden said “we’re not certain” who was behind the attack on the Florida IT company and added:

The initial thinking was it was not the Russian government but we’re not sure yet.

Kaseya’s chief executive, Fred Voccola, told the press that the company had found the vulnerability and would “release that patch as quickly as possible to get our customers back up and running.” John Hammond, Huntress senior security researcher, said that this single piece of shared software allowed hundreds of companies to get exploited. “This is a colossal and devastating supply chain attack,” Hammond stressed on Friday.

Ransomware Has Pushed the Biden Administration Toward Investigating the Crypto Ecosystem

Biden’s statements follow U.S. Department of State’s undersecretary of state for political affairs Victoria Nuland’s comments about the Colonial Pipeline hack. Speaking of a discussion she had with Salvadoran president Nayib Bukele, Nuland remarked that after the Colonial Pipeline ransomware hack the U.S. State Department was taking a “tough look at bitcoin.”

The U.S.-based energy firm Colonial Pipeline saw its infrastructure fold in May after a ransomware gang exploited the system. Colonial Pipeline then paid the hackers 75 bitcoin (BTC) to get its infrastructure back online. However, in early June, U.S. law enforcement agencies said they recovered a majority of the funds (63.70 BTC) that were meant to go to the ransomware gang members.

Before the Kaseya hack, Biden’s administration had already published a “Memorandum on Establishing the Fight Against Corruption as a Core United States National Security Interest” in the first week of June. Biden’s directive to federal agencies put cryptocurrencies in the spotlight and the administration explains that the directive is meant to bolster national security.

A Kaseya hack response team member said that the breach on Friday sent out a myriad of ransom demands to all the businesses that were infected. Reuters reports that demands for “a few thousand dollars to $5 million or more” were sent to the clients affected by the Kaseya ransomware attack.

What do you think about Joe Biden giving a directive to U.S. intelligence agencies to investigate the Kaseya ransomware hack? Let us know what you think about this subject in the comments section below.

Bank of Russia to Launch Digital Ruble Prototype by End of Year

20/05/2021 by Idelto Editor

The Central Bank of Russia (CBR) is preparing to release a digital prototype of the national fiat towards the end of 2021, a high-ranking official has confirmed. Transfers between private individuals will be free of charge with the digital ruble, which is going to have legal tender status on par with Russia’s traditional currency.

Bank of Russia to Work With Financial Sector on Digital Ruble Project

The monetary policy regulator of the Russian Federation, also known as Bank of Russia, has been working to digitalize the ruble since mid-October when its plan was announced to the public. The Russian central bank digital currency (CBDC) will be designed as a unique digital code stored in dedicated electronic wallets. The coin will become a fully-fledged means of payment that Russians will be able to use alongside the regular ruble.

The bank has already published a consultative report and presented the concept of the new digital ruble. “We’ll make a prototype at the end of the year,” CBR Deputy Governor Olga Skorobogatova said this week, quoted by RIA Novosti. Speaking at an open meeting of the parliamentary Financial Markets Committee, Skorobogatova noted that Bank of Russia is going to work with the Russian financial sector to determine the different stages of the project’s implementation.

Russia’s CBDC to Facilitate Free P2P Transactions

Russian policy makers and regulators have been mulling over the need for a national digital currency for years but developments in other countries have convinced authorities in Moscow to accelerate the project. With decentralized cryptocurrencies rapidly gaining popularity, dozens of central banks have started exploring options to launch their own CBDCs.

China has been advancing with its digital yuan while the U.S. Federal Reserve now plans to unveil digital dollar prototypes in July. Meanwhile, the European Central Bank is deepening its analysis of how to digitalize the common European currency and its Governing Council will decide around mid-2021 whether to initiate a digital euro project.

According to a poll released last month, half of Russian residents feel ready to start using a digital ruble. In April, Skorobogatova revealed that peer-to-peer (P2P) transfers between private individuals will be free of charge on the new network. The commission on payments for goods and services will be similar to the current rates of Russia’s Faster Payments System (FPS), developed by Bank of Russia and the National Payment Card System.

Commercial banks have not raised any objections to the planned digital ruble, the central bank noted earlier this year. Quoted by Forklog, CBR Deputy Governor Alexei Zabotkin stated in January that the Russian CBDC will serve as an alternative payment method expected to cut costs and lower rates of payment services offered in the country. Bank of Russia has also opened its regulatory sandbox for projects related to cryptocurrencies which were regulated with the adoption of the Law “On Digital Financial Assets.”

What do you think about Russia’s project to launch a digital ruble and CBDCs in general? Share your thoughts on the subject in the comments section below.