What will happen to crypto in Russia if the country is blacklisted by the FATF
Date: 2023-06-20 Author: Karina Ziganova Categories: IN WORLD
Russia is in danger of being blacklisted by the FATF. We tell you how the new status may affect the crypto industry of the Russian Federation
Russia risks being blacklisted by the Financial Action Task Force on Money Laundering (FATF), the main international anti-money laundering organization. In the period from 19 to 23 June, members of the organization meet in Paris. One of the topics for discussion, according to media reports, may be new restrictions for the Russian Federation, including the addition of the country to the gray or black list of the FATF.
Interesting! Russia has already been blacklisted by the FATF. In 2002, after attempts by the Russian authorities to form a legal framework to combat money laundering, the country was excluded from it.
What happened
Russia risks being blacklisted by the Financial Action Task Force on Money Laundering (FATF), the main international anti-money laundering organization. In the period from 19 to 23 June, members of the organization meet in Paris. One of the topics for discussion, according to media reports, may be new restrictions for the Russian Federation, including the addition of the country to the gray or black list of the FATF.
Interesting! Russia has already been blacklisted by the FATF. In 2002, after attempts by the Russian authorities to form a legal framework to combat money laundering, the country was excluded from it.
How the FATF decision can affect the Russian Federation
The gray list includes countries that are under enhanced control - under the close supervision of the organization. Such a "mark" is a reason for other market participants, if possible, to avoid contacts with the Russian Federation.
Being blacklisted by the FATF is fraught with tightening Russia's isolation in the financial market. For example, in this case, transactions in the Russian Federation will be equated, in terms of risk, to transfers to North Korea and Iran. If the regulator imposes its label on Russia, North Korea, Iran and Myanmar will become the country's "neighbors" on the black list.
Other participants may consider the inclusion of Russia in the FATF blacklist as a label that indicates the undesirability of cooperation with the country due to the insecurity of settlements. Technically, such a label of the regulator indicates that the authorities of the jurisdiction do not make proper efforts to combat money laundering.
It is noteworthy that since 2003 Russia has been a member of the FATF. The Chairman of the Central Bank Elvira Nabiullina is confident that the representatives of the organization have no reason to exclude Russia from the list of participating countries. Vedomosti writes that if the Russian Federation loses its membership in the FATF, the country will have to turn to cryptocurrencies.
That the FATF blacklist will change the crypto market of the Russian Federation
Other participants may consider the inclusion of Russia in the FATF blacklist as a label that indicates the undesirability of cooperation with the country due to the insecurity of settlements. Technically, such a label of the regulator indicates that the authorities of the jurisdiction do not make proper efforts to combat money laundering.
It is noteworthy that since 2003 Russia has been a member of the FATF. The Chairman of the Central Bank Elvira Nabiullina is confident that the representatives of the organization have no reason to exclude Russia from the list of participating countries. Vedomosti writes that if the Russian Federation loses its membership in the FATF, the country will have to turn to cryptocurrencies.
That the FATF blacklist will change the crypto market of the Russian Federation
Andrey Tugarin, Managing Partner of GMT Legal, believes that the inclusion of the Russian Federation in the black or gray list of the FATF will not cause a negative impact on the development of the crypto sector in the country
"Perhaps we will be able to observe the opposite trend: the inclusion of Russia in such lists will further complicate traditional international bank transfers, which means that the need to use cryptocurrency for cross-border transactions will only increase. Thus, if Russia is blacklisted or grayed by the FATF, a more rapid development of the crypto industry is possible," Andrey Tugarin summed up.
Georgy Svirin, a specialist in international financial markets at the FINMIR marketplace, added a "fly in the ointment". In his opinion, inclusion in the black list would mean the impossibility of normal international trade and the introduction of restrictions on sending remittances abroad for both companies and individuals.
"The biggest problem for Russia when included in the black list will be the refusal to continue cooperation between friendly countries for fear of imposing sanctions by the West and the United States," our interlocutor is sure.
At the same time, Georgy Svirin, like Andrei Tugarin, sees in the pressure of the FATF the prerequisites for the development of settlements in digital assets.
Our interlocutor also commented on the possible consequences of including Russia in the gray list of the organization:
"As for the gray list, at the moment, it contains 23 countries, including Turkey, the United Arab Emirates, South Africa, and others. Adding Russia to the gray list will not have much impact on it, since the country is already under the strongest sanctions pressure from Western countries and the United States.
Olga Solovyova, Vice President for Finance at the International Investment Company UOC Capital, also joined the discussion of the likely consequences of the regulator's pressure on the Russian Federation. She also believes that Russia's blacklisting by FAFT will complicate international transactions, financing the state's foreign policy will become extremely problematic.
"Every payment, transfer, order will be carried out with great difficulty, and some foreign banks will refuse to work with Russia," warns our interlocutor.
Olga Solovyova is sure that cryptocurrencies can become a solution to the problem in conditions of financial isolation for the Russian Federation.
Vasily Kudrin, Investment Director, Partner of the Lybrion International Digital Asset Group, largely agreed with his colleagues. He believes that FAFT's attempts to put pressure on Russia can contribute to the development of the decentralized finance market.
Our interlocutor noted that in Russia, due to the uncertain legal regulation of the cryptosphere, the FATF standards for the crypto industry were not actually implemented in the legislation of the Russian Federation and were not enforced. Therefore, the inclusion of Russia in the black or gray list of the FATF, most likely, will not be able to negatively affect the development of the crypto industry in the country.
"Perhaps we will be able to observe the opposite trend: the inclusion of Russia in such lists will further complicate traditional international bank transfers, which means that the need to use cryptocurrency for cross-border transactions will only increase. Thus, if Russia is blacklisted or grayed by the FATF, a more rapid development of the crypto industry is possible," Andrey Tugarin summed up.
Georgy Svirin, a specialist in international financial markets at the FINMIR marketplace, added a "fly in the ointment". In his opinion, inclusion in the black list would mean the impossibility of normal international trade and the introduction of restrictions on sending remittances abroad for both companies and individuals.
"The biggest problem for Russia when included in the black list will be the refusal to continue cooperation between friendly countries for fear of imposing sanctions by the West and the United States," our interlocutor is sure.
At the same time, Georgy Svirin, like Andrei Tugarin, sees in the pressure of the FATF the prerequisites for the development of settlements in digital assets.
Our interlocutor also commented on the possible consequences of including Russia in the gray list of the organization:
"As for the gray list, at the moment, it contains 23 countries, including Turkey, the United Arab Emirates, South Africa, and others. Adding Russia to the gray list will not have much impact on it, since the country is already under the strongest sanctions pressure from Western countries and the United States.
Olga Solovyova, Vice President for Finance at the International Investment Company UOC Capital, also joined the discussion of the likely consequences of the regulator's pressure on the Russian Federation. She also believes that Russia's blacklisting by FAFT will complicate international transactions, financing the state's foreign policy will become extremely problematic.
"Every payment, transfer, order will be carried out with great difficulty, and some foreign banks will refuse to work with Russia," warns our interlocutor.
Olga Solovyova is sure that cryptocurrencies can become a solution to the problem in conditions of financial isolation for the Russian Federation.
Vasily Kudrin, Investment Director, Partner of the Lybrion International Digital Asset Group, largely agreed with his colleagues. He believes that FAFT's attempts to put pressure on Russia can contribute to the development of the decentralized finance market.
Summing up
If the FAFT is blacklisted, Russia risks becoming isolated in the financial market and losing the opportunity to settle accounts with many partners in the usual ways. It is possible that a number of countries friendly to the Russian Federation will refuse further cooperation.
If the FAFT is blacklisted, Russia risks becoming isolated in the financial market and losing the opportunity to settle accounts with many partners in the usual ways. It is possible that a number of countries friendly to the Russian Federation will refuse further cooperation.
A decrease in the availability of classical financial instruments may contribute to the growing popularity of cryptocurrencies in Russia, since the country simply will have no other alternatives. Therefore, FAFT's pressure on the Russian Federation can have a positive impact on the country's crypto industry.
