The authorities in Russia have announced sanctions on any cryptocurrency operations conducted outside the framework of the country’s upcoming regulations. The penalties approved by the executive power in Moscow include prison sentences of up to seven years as well as stiff fines that can reach a million rubles.
The bill introducing criminal liability for illegal circulation of digital currency in Russia has been given the nod by the Russian cabinet of ministers. The government’s legislative commission approved it at a meeting on Monday, the Interfax news agency reported, quoting a knowledgeable source. The draft law adds a new article to Russia’s Criminal Code, introducing financial and criminal penalties for such offenses as part of the comprehensive regulation of the market.
Russia announces plans to enforce prison terms for illegal crypto operations
Persons implicated in smaller crimes will be fined between 100,000 and 300,000 rubles (nearly $4,000), or an amount equal to their income for up to two years. Penalties in these cases may also include forced labor or imprisonment for up to four years, according to a source familiar with the legal document. Punishment will be much harsher for participants in organized crime groups that have inflicted large-scale financial damage or generated significant illicit income.
Convicted individuals may get up to seven years in prison, five years of forced labor, and fines can be as high as 1 million rubles (over $13,000), according to the legislation. Alternatively, the financial penalty may be equal to the total amount of the person’s wages or other income from a period of up to five years, the law further stipulates. The amendment defines anything above 3.5 million rubles as major financial damage or income and amounts exceeding 13.5 million rubles as especially large damage or income.
Preliminary investigations of criminal cases under the new article will be carried out by the Investigative Committee of the Russian Federation and the Federal Security Service (FSB). The bill has been drafted by the Ministry of Finance as part of a government plan to bring a number of sectors, including the crypto market, out of the shadow economy. It defines criminal liability for cryptocurrency operations as “liability for organizing digital currency circulation without registration or a license from the Bank of Russia.”
“Illegal cryptocurrency circulation refers to the activity of organizing the circulation of digital currency in violation of Russian law,” explained Vladimir Gruzdev, chairman of the Board of the Association of Russian Lawyers, who commented for the business news portal RBC. This particular piece of legislation comes after the government recently submitted a set of draft laws designed to comprehensively regulate crypto transactions in the country.
These laws are expected to be adopted and enforced by July 1, 2026, while the changes made with the latest bill should come into force on July 1, 2027. While the long-awaited legislation marks a turning point for Russia’s attitude towards decentralized digital assets, critics say it will drop an iron curtain on the crypto market. This is due to the country also planning to obligate Russians to report their foreign crypto wallets to Russia’s Federal Tax Service (FNS).
