The Central Bank of the Russian Federation introduces oversight for misselling in cryptocurrency sales: punishment for concealing risks is inevitable.
The Bank of Russia has announced the launch of mandatory monitoring of misselling practices in the sale of digital currencies and related financial instruments. This decision is a natural step in the process of forming a civilized crypto market in the country. The regulator intends to strictly suppress attempts by financial organizations to mislead clients by selling one product under the guise of another or concealing its key characteristics.
Starting September 1, when digital currencies become available to retail investors through licensed intermediaries, control over the quality of customer information will be conducted from the very first day. Central Bank Deputy Chairman Mikhail Mamuta emphasizes that at the initial stage, it is critically important to assess not only how banks and brokers communicate potential returns, but also how honestly and fully they disclose risks associated with the volatility and uncertainty of crypto assets.
Why formal barriers are not enough
The filters already embedded in the rules, such as mandatory testing of customer knowledge and limits on transaction amounts depending on the level of risk, are only the first line of defense. The testing system certainly filters out some inexperienced investors, but it cannot guarantee that the seller will not embellish the picture at the stage of the actual transaction. That is why the Central Bank is adding its own oversight of seller behavior to the formal barriers. The regulator is determined: violations will be followed by penalties, although, as Mamuta put it, there is hope that it will not come to that.
Regulatory context
Let me remind you that in August, the president signed a law that for the first time comprehensively regulates the circulation of digital currencies and digital rights in Russia. The document defines the rules for the operation of crypto exchanges, depositories, and other market participants, as well as the conditions for acquiring assets. However, as I noted earlier, it is precisely the Central Bank's by-laws — testing criteria, the procedure for registries, and requirements for depositories — that will determine the actual strictness of the rules far more than the text of the law itself.
At the same time, the industry still has questions about certain provisions. For example, the article allowing digital currency to be provided as a loan only to a limited circle of persons — crypto brokers, managers, and clearing organizations — is controversial. This effectively excludes miners and private holders of large portfolios from the process, which creates a legal conflict and narrows the opportunities for legal use of assets.
My view: Introducing oversight of misselling is a correct and timely step that will increase trust in the market. However, the regulator will need to find a balance between protecting the retail investor and excessive pressure on business, otherwise we risk ending up in a situation where formal compliance with rules matters more than real benefit for the client.