The Bank of Russia has told commercial banks to monitor their customers’ transactions in relation to cryptocurrencies amid concerns they may be used to evade sanctions imposed after the invasion of Ukraine.

The Central Bank of Russia (CBR) reportedly sent out a letter to banks calling on them to spot “anomalies in the transactional activity” of their customers, such as changes in investment spending and cryptocurrency-related activities.

Banks have been informed to look into transactions related to digital currencies, large transfers to other regions, and an unusual increase in the number of transactions.

Banks should also carefully monitor people or businesses trying to get around foreign currency restrictions as well as the withdrawal of assets by entities registered in “unfriendly” states.

The CBR advised banks: “In such cases, banks are advised to conduct an in-depth check on the client, consider refusing to complete the transaction, and classifying it as suspicious.”

The Bank of Russia is reportedly coordinating with the Rosfinmonitoring financial watchdog (Federal Financial Monitoring Service of the Russian Federation).

The CBR has been a critic of the ongoing attempts to regulate the cryptocurrency market in the country, believing it holds risks for citizens and Russia’s economic stability.

They proposed a ban on the mining, issuing and trading of cryptocurrencies in January and had previously told banks to block wallets and cards used on the crypto market.

However, the Ministry of Finance and other Russian institutions have supported the use of cryptocurrencies, albeit with strict government regulation.

Following the Russian invasion of Ukraine, Western countries have been imposing measures to prevent the Kremlin from using crypto assets to try to evade sanctions.