Russia’s c-bank bashes clearing centre over cryptocurrency-related operations

Maria Nikolova

The Bank of Russia has recommended that Clearing Center MFB gives up on off-exchange electronic contracts clearing operations involving the purchase and sale of cryptocurrencies.

The Central Bank of Russia has once again acted decisively with regard to the risks associated with cryptocurrencies. Earlier this week, Russian media reported of the “Megaregulator” voicing its discontent with the risk management procedures of the MFB Clearing Center.

Let’s note that MFB has among its partners digital platform “Voskhod”, which has unveiled a set of cryptocurrency projects.

In the end of August this year, MFB presented a new set of clearing rules on its website, including ones covering clearing of off-exchange electronic contracts for cryptocurrencies.

The Bank of Russia wants that MFB removes the rules associated with these contracts and presents the redacted version to the regulator. The recommendations have been sent via mail to the company.

Such contracts, according to the Central Bank, come along with high risks. The lack of an adequate risk management system means a threat to the interests of investors. The Central Bank stresses that cryptocurrencies are not regulated in Russia at present and that the operations involving cryptocurrencies have some of the features of illegal activities such as money laundering and terrorism financing.

The Bank of Russia also emphasized that the internal documentation of the clearing organization does not outline any measures for reducing the technological and other risks, related to virtual currencies.

In September this year, Russia’s financial “megaregulator” published an announcement reiterating its stance towards Bitcoin and its likes from January 2014, when the Bank of Russia said the use of Bitcoin is like the use of money surrogates and may be treated as a violation of the AML laws.

The regulator noted the high risks associated with the use of crypto currencies and said it was premature to allow them along with any financial instruments linked to crypto currencies to the exchanges and regulated markets or the payment structures of the Russian Federation.

Later in September this year, it became clear that the Russian authorities cannot reach a unified stance on cryptocurrency regulation. For the time being, they will focus on legalizing blockchain and related technologies.

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