Russia bill sets seven-year crypto jail terms

TLDR

Russia has drafted a law that would make running unlicensed crypto services a criminal offense punishable by up to seven years in prison.

1. The bill targets anyone organizing crypto circulation without a license from the Bank of Russia, with prison terms that rise to seven years for serious or organized violations.
2. It focuses on service providers (exchanges, brokers, custodians, OTC desks), not ordinary holders, and would give Russia one of the most punitive crypto regimes globally.
3. The proposal is still at the State Duma stage, with timing, enforcement scope, and interaction with other Russian crypto laws likely to shape how much it changes real-world usage.

Deep Dive

1. What The Bill Actually Does

Russias government has submitted a draft law to the State Duma that would introduce criminal liability for anyone offering crypto services without authorization from the central bank.

According to reporting on the draft, it targets those who organize digital currency circulation without a license, covering activities like exchange, custody, trading, brokerage, or acting as an intermediary for digital assets, and would cement the Bank of Russia as the key licensing authority.

Penalties scale with severity: individuals could face fines and up to four years in prison, while organized groups or cases involving large income or damage could receive compulsory labor or imprisonment of up to seven years, plus fines up to 1 million rubles or several years of income, as summarized in coverage by Cointelegraph and a CoinsKid community explainer referencing the same bill.

The Russian Supreme Court has criticized the proposal as premature and insufficiently justified before a broader Digital Currency and Digital Rights framework is fully in place, which shows the draft is still contested even inside the state apparatus.

2. Who Is Most Affected

The bill is aimed at unregistered service providers, not casual users holding or transacting crypto on licensed platforms.

That means the main impact would fall on domestic exchanges, OTC desks, custodians, brokers, and any businesses that help organize crypto flows without a central bank license, including those that currently operate in a gray area.

Analysts note that the regime would be harsher than the EUs MiCA or most US practice, which rely mainly on administrative and civil penalties, putting Russia closer to Chinas highly restrictive stance and increasing the risk that smaller Russian operators go underground or shut down.

3. What To Watch Next

The bill must still pass multiple readings in the State Duma, then be approved by the Federation Council and signed by the president, a process commentators estimate could take roughly 6 to 18 months with possible amendments.

Key variables for crypto markets include how organization of digital currency circulation is interpreted in practice, whether mining, DeFi frontends, and foreign platforms serving Russian users are pulled into the net, and how tightly rules are coordinated with sanctions enforcement.

Russia is already among the top countries for Bitcoin mining, and the central bank is pushing a digital ruble, so a stricter regime could both harden capital controls and accelerate an official CBDC while pushing more cross border flows into opaque or offshore channels.

Conclusion

Russias draft law would move its crypto policy from regulatory gray zones to explicit criminalization of unlicensed services, with penalties severe enough to reshape local market structure. The real impact will depend on how parliament finalizes the text and how aggressively authorities enforce it against domestic operators and Russia-linked offshore platforms.