Russia Builds Crypto Transaction Monitoring System Using AI
Russia has recently reportedly been developing systems using artificial intelligence (AI) to track and analyze transactions involving cryptocurrencies, such as Bitcoin, Dash and Monero.
The system prototype has been created and is currently in the testing phase. This news follows the signing of the crypto regulation that was passed by the President of Russia, Vladimir Putin into a legal law.
Crypto Monitoring System in Russia
The Russian government is planning a new system for tracking cryptocurrency transactions. This was reported by local media RBC quoting a letter to Parshin Maxim Viktorovich, Deputy Minister for Digital Development, Communications and Mass Media of Russia. The letter describes plans for the Federal Financial Monitoring Service of the Russian Federation (Rosfinmonitoring) to monitor cryptocurrency transactions.
Rosfinmonitoring is in charge of collecting and analyzing financial transactions to combat domestic and international money laundering, terrorist financing, and other financial crimes. According to the letter,
Transparent Blockchain
The project, called " Transparent Blockchain " or Transparent Blockchain, will "partially remove the anonymity of users of cryptocurrency transactions in the Bitcoin, Ethereum, Omni, Dash and Monero systems," the letter explained.
Authorities, Russian banks and financial organizations will be able to use the system to monitor and analyze cryptocurrency movements, identify service providers and carry out investigations into illegal circulation.
The letter also details if "urgent need" is required by Rosfinmonitoring in monitoring crypto transactions. This gives the government control over the circulation of cryptocurrencies and can prevent the use of crypto assets in “illegal schemes” such as drug trafficking, tax evasion, cyber crime, abuse of contracts, sale of information from closed databases, (and) financing related to extremist activity.
Furthermore, Nikita Kulikov, member of the State Duma expert board and founder of the Pravorobotov Autonomous Nonprofit Organization, noted that Rosfinmonitoring plans to create an AI system to "monitor the entire internet network for illegal acts with crypto assets" such as signs of money laundering and terrorist financing.
Monitoring System Trial
Moreover, the letter also explained that the prototype of this system was already in the manufacturing and testing stages in the field of drug distribution control. The system was developed by the Lebedev Physical Institute of the Russian Academy of Sciences, one of Russia's leading research institutes specializing in physics.
So far, the system has been developed without federal funding. However, if this project is taken over, it is estimated that the project will cost up to 760 million rubles from the federal budget.
The Russian President, Vladimir Putin, has signed regulations regarding cryptocurrencies. However, it is only limited as legal currency and cannot be used as a means of payment.