The Russian Central Bank: Joint efforts with banks to combat P2P cryptocurrency exchanges have been effective

The Central Bank of Russia says it is winning the fight against peer-to-peer (P2P) cryptocurrency exchanges, and that its "fight against illegal circulation of cryptocurrencies in Russia" has proven to be "successful". The number of high-risk P2P transactions conducted in the country "reduced by 2.8 times" compared to 2023 data. It made this claim in its latest financial stability assessment, which focuses on economic performance in the second and third quarters of fiscal year 2024. The Central Bank of Russia said it has been working with commercial banks across the country this year. Regulators and banks said they have joined forces to block dozens of transactions related to P2P trading platforms. It is understood that Russia's cryptocurrency trading market remains unregulated. Although Moscow introduced several laws targeting cryptocurrencies in the second half of 2024, none of them addressed issues related to exchanges. The exchange market is also highly fragmented and is full of shadowy players and companies who claim to be able to use cryptocurrencies to transfer cash across borders. As a result, the P2P market has swelled in size. In June 2023, a cybersecurity platform said Russian traders could conduct transactions worth about "$296 million" per day. The Russian Central Bank said in the report that underground cryptocurrency exchanges and P2P operators "usually use payment cards or accounts issued to fictitious individuals" for settlements, and combating such schemes has become a top priority. It is now "maintaining continuous cooperation" with credit institutions and providing banks with help in blocking transfers. In addition, traffic to global cryptocurrency platform websites from Russian IP addresses increased by 56.5% to 166.9 million visits. Russian visitors currently account for 7.5% of all visitors to major global cryptocurrency trading platforms, an increase of 1.3% since the last data was published. The bank also noted that in the third quarter of 2024, the "estimated balance of Russian cryptocurrency wallet holdings" (on exchanges) fell by 16% compared to March. Russians held about $6.1 billion in these wallets, of which 69% was Bitcoin, and the remaining tokens were Ethereum (21%) and stablecoins (10%). (RBC)