Russian Agency Orders For A Software To Track Crypto Wallets. |

Rosfinmonitoring, a Russian agency responsible for investigating financial crimes in the country, has ordered for a new system to be used to track bitcoin and other digital currencies transactions. The new system is forged to beef up the agency capacity to investigate financial fraud, money laundering, and terrorist financing as well as to monitor digital currency wallets tied to certain persons involved in crime. According to a report in BBC Russia, the new cryptocurrency analysis software feature will be integrated into the agency’s current financial analysis system; the Unified System of Rosfinmonitoring.

The Crypto Analytical Software.

The BBC blog post further elaborated that the analytical tool will act as a central network linking a wide range of financial and criminal databases. The system will be integrated to the Unified Information System to enable State authorities to fetch suspect’s bank accounts, credit card, cell phone information, and specific data relating to cryptocurrency wallet and digital currency transactions.

According to the report, the crypto-analytical tool will not represent an expansion of any surveillance powers for the Russian Financial watchdog.  It is basically a more potent tool for analyzing blockchain information that is, and always has been, publicly available.  The upgrade will be developed by the Moscow Institute for Security and Information Analysis (SPI) and is estimated to cost around 195 million rubles (approximately$2.8 million). However, Russia’s Federal Financial Monitoring Service declined to disclose any details about its ordered crypto-analytics tool, with its press office saying in an email to BBC Russia that information about the tool is classified.

Rosfinmonitoring has taken a perilous stance towards digital currencies. In a statement published four years ago, Russia’s Federal Financial Monitoring Service alleged that digital currencies were actively used by criminals to trade hardcore drugs and weapons. The digital currency was considered a cogent evidence of terrorist financing or money laundering. While the agency has mechanisms in place to investigate cryptocurrency frauds, they tend to be more piecemeal, and this new crypto analytics software is designed to be more comprehensive.

However, proponents of cryptocurrency argue that the new crypto- analytical tool will not amount to anything “ground-breaking.”  Anton Merkurov, a notable Bitcoin advocate, and Satoshi.fm’s chief editor stated that:

trying to track illicit digital currencies transactions is difficult than trying to find a microorganism under a microscope in a drop of water. According to Merkurov, thinking to find illegal bitcoin transaction in a global peer to peer network could proof short-sighted.

 

Rosfinmonitoring is not the first federal agency to collaborate with a technology firm in an effort to decode Bitcoins and other cryptocurrency transactions. In 2017, United States’ Internal Revenue Service (IRS) signed a one-year deal with Chain analysis in a move to help detect tax evasions. The $124,000 deal was to connect the IRIS with the self-touted “leading provider of Anti-Money Laundering system for Bitcoin (BTC)” through September 2018.

Also, SPI, a Russian technological firm that majors in data analysis and visualization had earlier developed the iRule system, which was used by the Russian security forces and Rosfinmonitoring’s insurance firms. SPI is expected to have integrated the analytical tool to the Unified System of Rosfinmonitoring to process data on cryptocurrency transactions and wallets before the end of this year.

The US Department of Homeland Security (DHS) also funded a federal research lab run by Lockheed Martin to develop a bitcoin analytics tool for the DHS. Danish cybercrime police unit has also claimed to have created a specialized software tool to track cryptocurrency transactions specifically bitcoins, one that has led to the nab and prosecution of drug traffickers.

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