Russia moves to criminalize unlicensed crypto services

TLDR

Russia is advancing a draft law that would make running unlicensed crypto services a criminal offense with fines and possible prison time.

1. The bill would criminalize any crypto service operating without Bank of Russia approval, with penalties up to seven years in prison and large fines.
2. It expands central bank and security-agency control over Russias crypto sector, hitting unregistered exchanges, OTC desks, miners and infrastructure operators hardest.
3. The law is not final yet, and Russias Supreme Court has flagged it as premature, so implementation details and timing remain uncertain.

Deep Dive

1. What The New Bill Actually Does

A draft bill submitted to Russias State Duma would criminalize unlicensed crypto services, meaning any party facilitating digital currency circulation without approval from the Bank of Russia. According to a detailed summary, individuals could face fines up to about $4,000 and up to four years in prison, while organized groups could get up to seven years in prison or five years of compulsory labor, plus fines up to one million rubles (around $13,100) or a share of income over five years.

The proposal would extend criminal liability beyond existing administrative penalties and explicitly tie legality of crypto activity to central bank licensing and supervision, with investigations involving the Investigative Committee and the Federal Security Service.

2. Who Is Likely To Be Affected

The bill builds on earlier measures that targeted illegal crypto mining and infrastructure operators and now broadens the scope to all unlicensed digital asset service providers in Russia. That likely includes:

1. Unregistered exchanges, OTC dealers and P2P brokers converting rubles to crypto.
2. Mining farms and hosting providers running outside approved regimes.
3. Any platform offering custodial wallets or transfers without Bank of Russia authorization.

Holding crypto in self-custody or making occasional peer to peer transfers is not the explicit focus, but enforcement could still pressure informal P2P markets if they are seen as organised activity.

3. Status, Timing And What To Watch

Importantly, this is still a draft. Russias Supreme Court has criticized the proposal as premature, warning that imposing criminal penalties before a broader Digital Currency law comes into force (expected around July) could create legal inconsistencies.

Next key signals to watch are:

1. Whether Parliament amends the bill to narrow or clarify unlicensed services.
2. How the final Digital Currency law defines legal use of crypto versus the digital ruble.
3. Early enforcement cases that show whether authorities target large operators or also smaller P2P activity.

Conclusion

Russias move to criminalize unlicensed crypto services fits a broader pattern of bringing digital assets under banking style control, with the central bank as gatekeeper and security agencies involved in enforcement. If the bill passes with strong penalties intact, expect Russian facing crypto liquidity to migrate toward a small set of licensed venues and offshore platforms, while the legal room for informal exchanges, miners and OTC desks tightens significantly.