Rosfinmonitoring Allocates 20 Million Rubles for Bitcoin Transaction Monitoring
The Federal Financial Monitoring Service (Rosfinmonitoring), which serves as Russia’s financial intelligence agency, has selected a contractor to develop a “module for monitoring and analyzing cryptocurrency transactions using Bitcoin” and has also purchased the necessary equipment. This was reported by RBC, citing the government procurement website.
Procurement Details
At the end of June this year, the agency announced a tender for the “Supply of equipment for creating a module for monitoring and analyzing cryptocurrency transactions using Bitcoin,” with a value of 5,917,800 rubles. In mid-July, a bidding process took place with two participants: Monitor Company LLC and Sigma LLC, both offering the same price—5,326,020 rubles. Monitor Company LLC was ultimately selected as the winner. The main client of “MonKo” is Vniioceangeologia, and the company’s revenue for 2020 was nearly 243 million rubles.
According to the technical specifications, the equipment set includes four servers of different types:
- First server: Equipped with a processor with at least 16 cores, a frequency of no less than 2.3 GHz (with the ability to boost to at least 3.7 GHz), and a thermal design power not exceeding 150 W. Other requirements include at least 64 GB of ECC RAM with a module frequency of no less than 2660 MHz, SSD drives with a DWPD reliability level of at least 1, total usable RAID1 storage of at least 400 GB, at least two USB 3.0 ports, and a dedicated Ethernet service port for remote management and monitoring with a minimum data transfer rate of 1 Gbps.
- Second server: Must have at least two processor slots and come with two installed processors with the same specifications as the first server. Other requirements are identical to the first server.
Development Contract for Monitoring Module
Another tender, “Development of a module for monitoring and analyzing cryptocurrency transactions using Bitcoin,” valued at 19,603,300 rubles, was also posted on the government procurement portal at the end of June. The bidding was held recently, with RCO LLC offering to complete the work for 14,702,478 rubles, and the Innopolis University non-profit organization lowering the bid to 10,101,010 rubles.
RCO LLC won the contract. The company is controlled by Rambler Internet Holding LLC, which, through a chain of companies, is owned by Sberbank.
Purpose and Functionality of the Program
The program commissioned by Rosfinmonitoring will analyze the behavior of cryptocurrency market participants to identify them, create participant profiles, assess their roles in economic activities, and determine the likelihood of their involvement in illegal activities.
In February 2021, Rosfinmonitoring head Yuri Chikhanchin told Vladimir Putin that the “Transparent Blockchain” system would allow the agency “to see all movements involving cryptocurrency, that is, attempts to hide behind cryptocurrency.” This would make it possible to track such transactions and, most importantly, to identify criminal activity within the overall flow.
In March, Rosfinmonitoring named the most popular cryptocurrencies used by criminals: Bitcoin, Ethereum, and Monero.
Expert Opinions on Blockchain Transparency
Efim Kazantsev, an expert at Moscow Digital School, explains that in public blockchains like Bitcoin or Ethereum, all transactions are publicly accessible by default and can be analyzed by anyone. According to him, various companies are already engaged in analyzing cryptocurrency transactions in public blockchains.
Roman Yankovsky, a member of the Commission for Legal Support of the Digital Economy at the Moscow branch of the Russian Lawyers Association, notes that in addition to public blockchains, there are also private commercial blockchains, such as RippleNet. In such cases, everything depends on the agreement governing the use of the blockchain. This document may specify conditions under which information about asset movements within the blockchain cannot be used by third parties.