The Central Bank is tightening control: sanctions will follow for concealing cryptocurrency risks during sales.
The Bank of Russia has announced the introduction of mandatory monitoring of misselling practices in the sale of digital currencies and other crypto instruments. The regulator intends to strictly crack down on cases where financial organizations sell one product under the guise of another or conceal key characteristics of an asset. This involves direct liability for unfair client information practices.
Starting September 1, when digital currencies become available to the broad retail market through licensed intermediaries, the quality of explanatory work with buyers will come to the forefront. As I note in my analysis, this is a logical continuation of the course toward institutionalizing the market: formal barriers, such as testing and limits, do not work without oversight of sellers' behavior itself.
What exactly the regulator will check
Supervision will become mandatory, as regulation of digital currencies in the country is only just taking shape. Special emphasis at the first stage is placed on how honestly and fully financial organizations disclose risks, rather than just potential returns. The regulator has already built filters into the rules: the sale of crypto assets to unqualified investors will be accompanied by mandatory testing and limits on the amount depending on the level of risk.
However, testing and limits only remove part of the risks at the entry point. They do not guarantee that the buyer will be told the whole truth during the sale. That is why the Central Bank adds its own oversight of sellers' behavior to the formal barriers. Violations will be followed by penalties, although, as the agency emphasizes, there is hope that it will not come to that.
Context of the new regulation
Let me remind you that in August, a law was signed that for the first time comprehensively regulates the circulation of digital currencies and digital rights. The document establishes rules for crypto exchanges, depositories, and other market participants. For unqualified investors, a limit of 300,000 rubles per year has been set for purchasing assets through a single intermediary. At the same time, as experts note, distributing transactions across different licensed platforms remains a legal way to bypass this threshold.
Experts themselves call the law an institutionalization of the market, rather than its legalization in the consumer sense. The Central Bank's by-laws — testing criteria, the registry procedure, requirements for depositories — will determine the actual strictness of the rules more than the text of the law itself.
My view: the Central Bank's initiative is an important step toward a civilized market, but the key intrigue lies in how the regulator will interpret "quality information." If the approach is formal, we will see a rise in gray schemes. If the Central Bank shows flexibility, it will become a precedent for other jurisdictions watching the Russian experiment with digital assets.