The State Duma's revised draft law on crypto transactions allows banks to block transfers they suspect are illegal, introducing new terms and criteria.
The Financial Market Committee of the State Duma has amended a draft law concerning digital currencies and rights, now set for its second reading. The updated proposal alters how banks can block cryptocurrency transactions deemed illegal.
The initial version of the draft included two specific registers to be maintained by a designated authority. These were intended to track legal entities, individual entrepreneurs, and foreign nationals involved in crypto transactions, along with foreign payment providers facilitating transfers to these individuals. However, these registers have been eliminated in the new draft.
In their place, the concept of an "unauthorized recipient" has been introduced, referring to entities that banks suspect are engaging in digital currency transactions outside the legal framework in Russia. The draft lacks clear definitions for what constitutes suspicion and does not delegate this definition to the Bank of Russia; rather, banks will create their own criteria.
Banks are required to report any identified unauthorized recipients to the Central Bank, which will only provide limited information about the foreign payment service providers involved in these transfers. Notably, there is no requirement for this information to be publicly disclosed.
Who Is Responsible for Blocking Transfers
The revised proposal removes several types of entities, such as payment agents, telecom companies, and postal services, from the transfer-blocking mechanism. The responsibility now lies primarily with credit institutions, branches of foreign banks, and issuers of payment cards.
When a transfer is denied, banks must inform the client according to their contractual agreements. However, the draft does not specify how unauthorized recipients will be informed or how they can contest a denial.
Certain transactions are exempt from being blocked, including those linked to foreign trade contracts, exchanges conducted by organizations, and transactions initiated by brokers or trust managers, contingent upon Bank of Russia approval.
The Duma is expected to further discuss the draft law on July 21. Earlier this month, the deputy chairman of the Central Bank, Vladimir Chistyukhin, indicated that a new law governing the cryptocurrency market in Russia would become effective on September 1.
