The State Duma tightens control: banks will get the right to block suspicious crypto transfers
The State Duma Committee on the Financial Market has presented an updated version of the bill "On Digital Currency and Digital Rights" for the second reading. The document radically changes the approach to combating illegal cryptocurrency turnover, granting banks broad powers to block transfers.
From Registries to "Unauthorized Recipients"
The initial version provided for maintaining two registries: the first for legal entities, individual entrepreneurs, and foreigners organizing cryptocurrency turnover outside the legal framework; the second for foreign payment providers servicing such violators. However, both lists were excluded for the second reading.
Instead, the concept of an "unauthorized recipient" is introduced — a recipient of funds that raises bank suspicions of organizing digital currency circulation without the status of a legal market participant in the Russian Federation. Critically, the bill does not establish criteria for such suspicions nor assign their development to the Bank of Russia. Each financial institution will determine them independently, recording them in internal documents.
Banks are required to transmit data on "unauthorized recipients" to the Central Bank. In response, the regulator can only provide information about foreign payment service providers servicing transfers in their favor. Publication of this information is not provided for.
Who Blocks Transfers and How
Payment agents, telecom operators, postal operators, and participants of the digital ruble platform are excluded from the mechanism. The obligation to refuse transfers is placed on credit institutions, branches of foreign banks, and payment card issuers.
The bank must immediately notify the client of the refusal in the manner prescribed in the contract. However, procedures for notifying the "unauthorized recipient" themselves and a mechanism for appealing the block are absent from the document. This creates significant risks for bona fide market participants.
The bank is not obligated to refuse a transfer only in three cases: if the operation is related to a foreign trade contract, the transfer is carried out on behalf of an organization exchanging digital currency, or the transaction is conducted on behalf of a broker or trustee with permission from the Central Bank.
The State Duma plans to consider the bill in the second reading on July 21. Let me remind you that First Deputy Chairman of the Central Bank Vladimir Chistyukhin previously stated that the law on regulating the crypto market in Russia will come into force on September 1.
My analysis: The abandonment of formal registries in favor of subjective "suspicion" criteria is a dangerous precedent. This grants banks disproportionately broad powers, creating grounds for abuse and blocking legitimate operations. Without clear rules and an appeal mechanism, bona fide market participants will find themselves in a vulnerable position.