Russia Targets Unlicensed Crypto Firms with Prison Terms and Heavy Fines

Highlights:

• Russia is planning jail terms and fines for unlicensed crypto firms operating without central bank approval.
• Russian authorities aim to control $129 billion in annual crypto flows moving through offshore platforms.
• The proposed law may split Russia’s crypto market into regulated and unregulated sectors for different use cases.

Russian lawmakers introduced a bill in the State Duma on Friday to penalize unauthorized crypto services operating within the country. The proposal targets individuals and firms that run digital asset operations without approval from the Bank of Russia. Lawmakers want to classify such activity as a criminal offense under a new legal provision.

REGULATION 🇷🇺 | Russia Introduces Crypto Bill With Severe Criminal Penalties and Prison Time for Unregistered Operations

Under the proposal submitted to the State Duma, individuals and entities involved in #organizing or #facilitating crypto transactions without #registration… pic.twitter.com/hDDlpsMKlk

— BitKE (@BitcoinKE) April 18, 2026

The draft defines illegal organization of digital currency circulation in Russia as a punishable act. Lawmakers plan to add Article 171.7 to the criminal code to enforce this definition.

Under the bill, individuals who provide crypto services without registration in Russia could face fines of up to $4,000. Courts may also impose prison sentences of up to four years for individuals who violate central bank rules. These penalties apply to operators who fail to register their cryptocurrency services with the Bank of Russia.

The bill increases penalties when organized groups conduct large-scale crypto operations without central bank approval. Courts may impose prison terms of up to seven years for coordinated illegal crypto activity. Judges may also assign up to five years of forced labor when groups generate a large income from unlicensed services.

Russian lawmakers included financial penalties of up to 1 million rubles for individuals and firms offering illegal crypto services. Courts may calculate these fines based on income earned over a five-year period.

The proposal sets a damage threshold of 3.5 million rubles to define significant harm caused by illegal cryptocurrency activity. This threshold could apply to routine crypto transactions, including exchanges processing around 50,000 USDT in Russia. As a result, traders and service providers could face criminal charges for moderate crypto activity. Russian officials expect the law to take effect in July next year if the State Duma approves the draft.

Unlicensed Crypto Firms Face Strict Penalties Under New Framework

Russian authorities introduced the bill after crypto activity in Russia grew beyond state oversight in recent years. Government estimates show that about $129 billion in crypto transactions leave state control each year through unregulated platforms. Daily cryptocurrency trading volumes reach around 50 billion rubles, which shows how much activity happens outside the Bank of Russia’s supervision.

Foreign platforms process a large share of crypto transactions from Russian users. Traders in Russia pay nearly $15 billion in fees to offshore exchanges each year. In comparison, the Moscow Exchange generates about $1 billion annually from regulated financial activity.

Russian regulators introduced the bill to control crypto transactions that move through offshore platforms. Authorities want traders to use platforms that follow Russian law and central bank rules. They also aim to reduce capital leaving the country through crypto transactions.

Russian officials are also preparing rules that allow brokers and traditional exchanges to offer crypto services. These rules will not require extra licenses for selected institutions. Regulators expect this move to bring more crypto activity into regulated platforms.

Court Questions Timing of New Cryptocurrency Law

Russia’s Supreme Court said lawmakers did not give enough legal reasons to impose criminal penalties in the bill. The court said authorities should wait until the digital currency law takes effect in July before enforcing such rules. Judges warned against applying criminal charges before completing the full legal framework.

Crypto analysts say these rules could split Russia’s cryptocurrency market into two parts. They expect one regulated sector and another unregulated system for cross-border transactions. In a related case, the Russia-based exchange Grinex stopped trading after losing more than 1 billion rubles in a suspected external attack.