The Central Bank of Russia will tackle misselling in cryptocurrency sales: penalties for concealing risks are 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. The regulator intends to strictly crack down on situations where a financial institution sells a client one product under the guise of another or deliberately conceals significant risks. This statement comes amid the upcoming start of retail cryptocurrency sales through licensed intermediaries on September 1.
In essence, this is about a new level of control. The regulator will monitor not only formal compliance with regulations, but also how honestly and fully sellers inform buyers about risks, rather than just potential returns. As emphasized, at the initial stage of legalization, it is crucial that the quality of communication with unqualified investors is impeccable.
What lies behind the new rules
Filters to protect retail investors are already in place: mandatory testing on product knowledge and purchase limits. However, as rightly noted, these barriers do not guarantee that the client will not be "fed" distorted information at the point of sale. Therefore, the Central Bank adds its own oversight of seller behavior to the formal restrictions. One does not exclude the other, but complements it.
It is important to understand the context. In August, a law was signed that for the first time comprehensively regulates the circulation of digital currencies and digital rights in Russia. The document establishes rules for exchangers, depositories, and other market participants. At the same time, as experts rightly note, the Central Bank's bylaws often determine the actual stringency of the rules more than the text of the law itself. They are the ones that set the testing criteria and requirements for depositories.
The industry also has complaints about certain provisions. For example, the article allowing loans in cryptocurrency to be issued only to a limited circle of persons — crypto brokers and trust managers — is considered controversial, leaving miners and large private asset holders out in the cold.
My view: The Central Bank's initiative is a logical step toward a civilized market. However, its effectiveness will depend on how quickly the regulator can identify violations and how painful the penalties turn out to be. Otherwise, we risk a situation where formal requirements are met, while the essence of misselling moves into gray schemes.