The Russian government has submitted a bill to the State Duma that would establish criminal liability for operating cryptocurrency services without a license from the Bank of Russia.
- Russia is introducing criminal liability of up to 7 years for unlicensed crypto services.
- All exchanges must obtain a Central Bank license by July 2026 or face prosecution.
- The state criminalizes private crypto use while simultaneously deploying it to evade Western sanctions.
- Russia’s Supreme Court has already flagged the penalties as “premature”.
If passed, the new Article 171.7 of the Criminal Code will make unlicensed “organization of digital currency circulation” a criminal offense carrying up to 4 years in prison for standard violations and up to 7 years when organized groups are involved or when damages exceed 13.5 million rubles (roughly $177,000).
Fines range from 100,000 to 1 million rubles depending on severity, while the threshold for “large-scale” violations is set at 3.5 million rubles (around $46,000). The bill does not stand alone – it functions as the criminal enforcement layer of a broader regulatory framework scheduled to take effect in two phases: July 2026 and July 2027.
Licensing, Caps, and Prohibitions
Under the new regime, all exchanges, brokers, and depositories will be required to obtain a Central Bank license to operate legally. For retail investors without qualified status, a yearly cap of 300,000 rubles (approximately $3,800) will apply to crypto purchases, alongside a mandatory risk-knowledge test. Using cryptocurrency for domestic payments will remain strictly prohibited regardless of the new regulatory framework.
The government is also planning to ban all cash-to-crypto conversions – a measure that effectively ends the era of anonymous office-based exchanges concentrated in Moscow business districts like Moscow City, where peer-to-peer trading has been particularly active. Daily crypto transactions in Russia are estimated at around $650 million, a significant portion of which currently flows outside any formal tax structure.
The bill has not gone unchallenged, even from within the system itself. Russia’s Supreme Court publicly stated that the criminal sanctions are “premature” and lack “reasoned justification” while the underlying digital currency law has yet to fully come into force. That kind of criticism is uncommon from that institution and signals genuine internal disagreement over the pace of the legislative process.
Industry analysts warn that the strict capital, cybersecurity, and transparency requirements embedded in the licensing regime will push smaller operators out and concentrate the market in the hands of institutions like Sberbank and T-Bank. The regulation is not simply organizing the market – it is reshaping who gets to participate in it at all.
A Double Standard: Restrictions for Citizens, a Tool for the State
The central contradiction in Russia’s crypto policy is hard to overlook. While citizens will be capped at $3,800 annually and risk criminal prosecution for unlicensed operations, the state itself is actively testing crypto for international payments as a mechanism to circumvent Western sanctions. Under an “Experimental Legal Regime,” selected companies are already permitted to use digital assets for cross-border trade. The National Payment Card System is being tested as a bridge between the ruble and crypto for international commerce – at the same moment ordinary Russians are being restricted from accessing those same assets.
The bill targeting crypto services runs parallel to separate amendments aimed at unregistered mining operations. Illegal mining now carries up to 2 years of forced labor or a fine of 1.5 million rubles. The backdrop is specific: since January 2025, mining has been banned in 10 to 13 regions of the country, including Dagestan and parts of Siberia, due to acute energy shortfalls. The severity of sanctions against miners follows a clear centralizing logic – energy resources are being directed toward industrial and state-aligned consumers rather than private GPU operations.
The Digital Ruble and Clearing the Competition
The criminalization of private crypto services coincides with the Central Bank’s push to establish the Digital Ruble as the dominant form of digital payment. Where Bitcoin offers decentralization and a degree of privacy, the Digital Ruble gives the Central Bank complete visibility over every transaction. Aggressive legislation against the alternatives makes that choice considerably less voluntary.
Despite the legislative pressure, a survey by Vyberu.ru found that 36% of investment-oriented Russians are ready to buy Bitcoin once the legal framework is finalized – which says more about the level of confidence in the traditional financial system than it does about enthusiasm for the regulation itself.
The information provided in this article is for educational purposes only and does not constitute financial, investment, or trading advice. Coindoo.com does not endorse or recommend any specific investment strategy or cryptocurrency. Always conduct your own research and consult with a licensed financial advisor before making any investment decisions.
Alex is an experienced financial journalist and cryptocurrency enthusiast. With over 8 years of experience covering the crypto, blockchain, and fintech industries, he is well-versed in the complex and ever-evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His approach allows him to break down complex ideas into accessible and in-depth content. Follow his publications to stay up to date with the most important trends and topics.