It seems to us that crypto trading is absolutely anonymous but in fact, it is not so. Crypto exchanges own a part of our personal data. In what cases can they share it? Let us find out.

  1. Coinbase
  2. When exchanges can transfer data to the authorities
  3. Where the powers of the executive authority of the Russian Federation end
  1. Coinbase

One of the largest crypto exchanges, Coinbase, told about a lot of requests received from financial regulators in different countries in 2020. From January to June 1914 requests were made to the trading platform from various departments with a request to provide information about customer accounts and other information. At the same time, 96.6% of requests were subject to proceeded criminal cases. To which the company said that it could not refuse to transmit information if the request has a legal basis.

Coinbase noted that in 2020, 58% of requests came from the United States, where the FBI was most often interested in data about traders. The second and third places in terms of the number of requests were the UK and Germany. Russia is not listed among the countries that requested data about Coinbase customers at all.

  • When exchanges can transfer data to the authorities

According to FATF international recommendations, operators of virtual asset services, including cryptoexchanges, must collect data on participants in operations with such assets. However, sites are required to transmit this information to the authorities only if there are grounds established by law, such as a court decision.

Crypto-exchanges can transmit information to the authorities in at least two other cases. Among them: the presence of a request sent through official channels of power, such as Interpol, or cooperation voluntarily.

  • Where the powers of the Executive bodies of the Russian Federation end

Sites located outside of Russian jurisdiction have no formal obligations to provide data to Russian law enforcement agencies. However, we remind you that the digital financial assets act (DFA) will come into force in 2021. According to the document, exchange operators registered due to the law, i.e., exchanges, will be required to provide data at the request of law enforcement agencies and by a court decision.

Regulation of cryptocurrencies will also be provided by a separate document on “digital currency”. It has not yet been adopted, but if it comes into force, it will also oblige Russian cryptoexchanges to provide information to law enforcement agencies.

At the same time, the operation of foreign trading platforms in Russia is not currently legalized, so companies may have no reason to cooperate with Russian regulators even after the DFA law comes into force.

At the end of September, the State Duma Committee on the financial market announced that a decision on amendments to the law on digital financial assets concerning the regulation of cryptocurrencies will be made within about a month. The deputies added that in addition to the proposals of the Ministry of Finance, other options also require consideration.

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