New Law Bans Anonymous Wallet Deposits To Curb Illicit Activities in Russia; Must KYC

The Russian government has passed a ruling to ban anonymous deposits into online wallets to curb illicit use of these anonymous funds. The banning would supposedly affect almost 10 million people who use different online wallet services such as Yandex, WebMoney, PayPal, and Kiwi.

People use these online payment and wallet services anonymously, where they top-up their wallet with a certain amount and then proceed to use it for different purposes, including buying of cryptocurrencies.

The government hopes to curb financing of terrorism and the illegal drug trade, which has been a growing concern given almost 10 million people make use of these online payment portals to make anonymous deposits to these online wallets.

The Russian government has been cautious about legalizing crypto use in the country since they believe legalizing crypto as a legal tender can undermine their sovereignty on issuing cash. However, Antonina Levashenko, an economist by profession, believes the measures taken against anonymous crypto wallet deposits won’t affect the blockchain space and the progress made in the decentralized ecosystem. Levashenko explained,

“Will it affect cryptocurrencies? Currently, these changes have been implemented only about electronic money by the amendments to the law on the national payment system. But shortly, undoubtedly, yes. FATF standards are always applied to new technologies by analogy: if at first the standards were spelled out for classic bank accounts, then they were first extended to electronic wallets and prepaid cards, and then to virtual wallets for cryptocurrencies, ”

Experts Believe the Impact of Ban Would be Minimal

Maria Stankevich, an EXMO crypto exchange business development manager, believes the current ruling by the government would only impact those exchanges which haven’t been following the compliance set by the regulatory authorities. She also noted that the current ban would force bad actors to either shut their operations or make changes to incorporate the compliance guidelines set by the authorities. Stankevich explained,

“A small insider: one large payment system … at one time refused us after a long passage of all compliance procedures. Colleagues explained this by the fact that despite the strong anti-money laundering and anti-fraud procedures, our exchange can replenish an account through the named payment systems, which, in turn, can be replenished with cash. This means that no one can trace the origin of these funds, which contradicts all the policies of this payment giant. We were distraught then but hoped that someday such a law would be adopted.”

Just last week, President Putin has signed a law for Law on Digital Financial Assets, which prohibits the use of bitcoin and other cryptocurrencies as a means of payment. The rules and guidelines related to the new Law on Digital Financial Assets would come into practice by January 1st, 2021.

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James W
James is a cryptocurrency enthusiast, an advocate for the development and exposure of blockchain technology, and believes in the use of digital assets for the good of the society. Enthralled by the huge potential of cryptocurrencies and their underlying technology – blockchain – James dedicated himself to learn more about the industry, becoming a highly sought-after writer in the sector. He covers news, white papers and any content related to cryptocurrency and blockchain in general.

[Alert] Use the author's self-conducted information at your own risk, do you own research, never invest more than you are willing to lose.

[Disclosure] The published news and content on BitcoinExchangeGuide should never be used or taken as financial investment advice. Understand trading cryptocurrencies is a very high-risk activity which can result in significant losses. Editorial Policy \\ Investment Disclaimer

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