Russia bill seeks prison terms for crypto

TLDR

Russia is moving to criminalize unlicensed crypto services, with potential prison time for operators, not a blanket ban on owning crypto.

1. A draft law would punish running unregistered crypto services with fines, up to four years in prison for individuals, and up to seven years for organized groups.
2. The bill expands a broader crackdown that channels Russian crypto activity into tightly controlled, KYCd, bank-linked platforms and crim inalizes grey-market mining and exchanges.
3. The proposal is not final: Russias Supreme Court has criticized it as premature, and details may change as wider digital currency laws take effect.

Deep Dive

1. What The Bill Actually Does

The government has submitted a bill to the State Duma that adds criminal liability for anyone organizing digital currency circulation without a license from the Bank of Russia. According to the draft, individuals who operate unregistered crypto services could face fines up to about $4,000 and up to four years in prison, while organized groups or large-scale operations could face forced labor or up to seven years in prison and fines up to 1 million rubles (around $13,100) tied to several years of income, as reported in a bill to criminalize unregistered crypto services.

The target is service providers, not casual holders: exchanges, brokers, custodians, OTC desks, and others offering crypto services without central bank approval. Private self-custody or using foreign platforms is not directly outlawed in this bill, though those areas are being addressed in separate regulations.

2. Part Of A Broader Crackdown

This criminal bill builds on earlier measures that already tightened Russias crypto regime. Prior laws limited non-qualified retail investors to about 300,000 rubles (around $3,700) in annual crypto purchases per intermediary and required trading through licensed platforms, while banks were banned from processing payments to unlicensed foreign exchanges, as summarized in a recent policy overview.

Authorities have also proposed criminal penalties for illegal crypto mining and are pushing to route most crypto trading through commercial bank apps and regulated intermediaries, with an eye toward supporting the digital ruble and limiting capital flight from a crypto market estimated in the hundreds of millions of dollars per day. This would make Russia one of the more restrictive major jurisdictions, closer to China than to the EU or US, where most sanctions for unlicensed crypto activity are administrative rather than criminal.

3. What Is Uncertain And What To Watch

Russias Supreme Court has already criticized the bill as premature, saying it lacks a strong justification for criminal penalties and should not apply before a broader Digital Currency and Digital Rights law expected to take effect in July, according to the same draft-law coverage. That means the text could be amended significantly during committee review and multiple parliamentary readings.

Implementation timing matters. Some proposals link full enforcement and liability for intermediaries to mid-2027, suggesting a transition period as regulators license domestic platforms and roll out identity-linked controls. For crypto users and businesses, the key signals will be: which Russian banks and exchanges gain licenses, how strictly authorities treat use of foreign platforms, and whether enforcement focuses on large operators or also hits small OTC desks and P2P brokers.

Conclusion

Russia is not simply banning crypto, but it is moving toward a highly controlled, license-only regime where unapproved service providers face real prison risk. For the crypto market, this likely means more activity channeled through a small number of state-supervised platforms, more pressure on grey-market exchanges and miners, and continued uncertainty until the wider digital currency framework and this criminal bill are finalized.