The risks of virtual currencies being used to launder money and facilitate illegal activities have been growing in 2017 and 2018, according to a report titled "National Money Laundering Risk Assessment" and prepared by Russia’s Federal Financial Monitoring Service.
The research established that Bitcoin was used for financing illegal drug production, distribution, and trade in 23 out of 85 constituent units of the Russian Federation. While the document does not specify which regions were involved, the fact itself is considered an alarming signal for both financial and law enforcement authorities of the country.
The report cites the level of anonymity as the primary reason behind the growing popularity of digital money within criminal structures.
"Anonymity of settlements using cryptocurrency can lead to the potential growth in popularity of this method in the commission of crimes, and in addition, complicates the investigation process," the document says.
Earlier this year, US authorities came to similar conclusions, noting that both criminals and drug users perceive cryptos as relatively anonymous and increasingly use them to sell and purchase illicit drugs.
The experts of the Federal Financial Monitoring Service acknowledged that economic crimes committed on the territory of Russia did not involve cryptocurrencies. However, digital money could be used at various stages of drug trafficking, for example, to finance drug laboratories and as a means of payment among drug dealers, distributors, and couriers.
Currently, Russia does not regulate cryptocurrency transactions in any way. At the end of May, the State Duma passed at first reading two draft bills designed to provide a legal framework for dealing with digital financial assets and ICOs and regulating the rights and obligations of industry participants. However, the adoption of the legislation may be postponed until autumn.
This article appeared first on Cryptovest
