Russia advances bill jailing unlicensed crypto operators

TLDR

Russia is moving to criminalize unlicensed crypto services, with a draft law introducing jail time and heavy fines for operators that are not approved by the central bank.

1. The bill would make offering unlicensed crypto services a criminal offense, with penalties up to seven years in prison and fines up to roughly 1 million rubles.
2. Any exchange, broker, or platform serving Russians would effectively need a Bank of Russia license, likely squeezing smaller players and pushing activity into a narrower, more controlled perimeter.
3. The proposal is still at the State Duma stage, faces criticism from Russia's Supreme Court, and will interact with a broader digital currency law expected in July.

Deep Dive

1. What The Bill Actually Does

Russia's government has submitted a draft law to the State Duma that adds criminal liability for anyone providing crypto services without registration or licensing from the Bank of Russia. Entities that organize "digital currency circulation" without approval could face fines and prison terms, according to the bill text summarized by Cointelegraph and other outlets.

For individuals, penalties include fines up to about 4,000 dollars and prison terms of up to four years, escalating to compulsory labor or imprisonment of up to seven years for organized groups or where the activity causes large financial damage or generates large income. Another clause allows fines up to 1 million rubles (around 13,000 dollars) or up to five years of the convicted person's income.

2. Impact On Operators And Users

The bill targets a wide range of activities: exchange, custody, brokerage, trading and other intermediary roles in digital assets without central bank authorization. That would likely hit:

1. Local OTC desks and informal P2P hubs that operate at scale.
2. Smaller domestic exchanges and service providers that cannot secure a license.
3. Foreign platforms that maintain a physical presence or legal entities tied to Russia.

Legitimate firms would face higher compliance and licensing costs, while non compliant operations may simply go deeper underground. Users could see fewer officially available venues, more reliance on VPNs or offshore platforms, and higher counterparty and legal risk if they interact with grey market services.

3. Where The Process And Risks Go Next

The bill is not law yet. It must pass multiple readings in the State Duma, then the Federation Council, then be signed by the president. Russia's Supreme Court has reportedly called the criminal penalties "premature" until a separate "Digital Currency and Digital Rights" law takes effect, expected in July, which could still shape the final framework.

Compared with the US and EU, which lean on administrative and civil penalties, this is a more punitive model, closer in spirit to China's hard line but still allowing tightly controlled, licensed activity. It also aligns with Russia's broader focus on financial control, sanctions evasion risk and potential promotion of a domestic CBDC.

Conclusion

Russia's move to attach prison terms to unlicensed crypto activity is a strong signal that it wants a tightly controlled, bank centered digital asset regime. For operators serving Russian clients, the direction is toward formal licensing or exit, with a growing risk that anything in the grey zone could be treated as a criminal matter rather than just a compliance issue.