Russia declares crypto anonymity a "myth"; exchanges share user data with law enforcement without court orders.

Russian authorities using blockchain tracking tool, Transparent Blockchain, to monitor crypto transactions.

The narrative that crypto transactions can’t be traced and are private is a myth, according to the legal head of Russia’s anti-money laundering agency (AMLA).

At the St. Petersburg International Legal Forum, Olga Tisen, legal head of Rosfinmonitoring, said that crypto exchanges in the country are actively sharing wallet owner data with the authorities upon request. She added that these platforms are making efforts to stay ahead of future regulations.

"Today’s crypto exchanges cooperate fully with law enforcement agencies and provide data on wallet owners upon request. They are also engaging in tasks related to tasks arising from the introduction of new types of legal regulation for crypto exchange activity."

Tisen further explained that while bank information is protected and requires a court order, crypto data isn’t. This allows the police to easily get their hands on it without any legal hurdles. She noted that some exchanges even mention on their websites that they’re working with law enforcement.

This might sound surprising, considering that crypto still operates in a bit of a legal gray area in the country. However, these platforms seem to be aiming to play it safe and follow stricter rules ahead of time.

Moreover, the Russian government is planning to keep an even closer eye on things. According to Tisen, Rosfinmonitoring plans to give banks access to a blockchain tracking tool called Transparent Blockchain by the year’s end.

This tool, which is already being used by the police and even agencies outside Russia, enables the tracking of crypto transactions. The Central Bank is also using it to keep tabs on how often Russians are checking out big international crypto exchanges online.

Over 12,000 regulators and officers across Russia and several neighboring countries have access to this blockchain tracking tool. The agency is also facing pressure to push for stricter rules around illegal crypto mining, which enjoys strong support from the Central Bank.

While Russia may not have fully regulated the crypto space, it’s already watching closely, and user privacy is quickly becoming a thing of the past.