Bank of Russia takes steps to protect crypto-currency companies from sanctions

The Central Bank of Russia has introduced measures to protect entities working with digital assets from the pressures of sanctions. These companies will be exempt from certain reporting requirements as part of a regulatory relief aimed at minimizing the burden on financial organizations.

Russia’s Central Bank eases supervision of digital asset platforms under sanctions.

The Central Bank of the Russian Federation (CBR) has authorized issuers of digital financial assets (DFAs) to withhold information sensitive to sanctions risks. The exemption, valid until July 1, 2023, covers data revealing the beneficial owners of these entities.

According to an announcement cited by Russian crypto media, the temporary reporting relief is part of a package of measures designed to help individuals and organizations operating within the Russian financial market infrastructure.

Although Russia has not yet regulated crypto-currencies like bitcoin, the existing law “on digital financial assets” allows companies to issue coins and tokens in controlled environments. Three “Information system operators in which FADs can be issued.“have already been authorized by the CBR. These include Russia’s largest bank, Sber, the tokenization service Atomyze and Lighthouse.

In the press release, the Bank of Russia explains that the easing of regulation and supervision granted to financial market participants and DFA issuers since the beginning of the year is intended to minimize the burden on these organizations in the current economic and geopolitical situation.

The Russian government and businesses have been the target of increasing Western sanctions imposed following Moscow’s decision to invade neighboring Ukraine in late February. The sanctions have severely limited their access to global finance and markets.

A proposal to legalize the use of crypto-currencies for international settlements to ease the pressure of sanctions has been supported by Russian institutions, including the central bank, which has traditionally maintained a hardline stance on crypto regulations.

The CBR insisted that the support offered to financial firms, including DFA issuers and exchange operators, has mitigated the negative effects of the restrictions and allowed them to adapt to the new conditions. The regulator is planning additional measures along the same lines, such as amendments to allow for the recognition of losses due to the sanctions.