Russia moves to criminalise unlicensed crypto services

Russia has introduced a bill in the State Duma to criminalise the operation of unregistered cryptocurrency services. The proposed law would penalise people and organisations who engage in cryptocurrency-related operations without the consent of the nation’s central bank.

Offenders could face fines and up to 4 years in prison, with harsher penalties of up to 7 years for organised or large-scale operations. The bill aims to bring tighter control over digital asset activity by targeting both small operators and larger networks operating outside regulatory oversight.

Understanding proposed legislation

A broad definition of “unlicensed crypto activity” is provided under the proposed legislation in Russia. It includes payment gateways, brokerage services, exchanges, trading platforms, and custody providers that deal with digital assets. This definition would include even serving as a middleman in the unauthorised purchase, sale, or transfer of cryptocurrency. The goal is to make sure that all companies involved in cryptocurrency follow proper licensing regulations.

The Central Bank of Russia is the primary authority in this framework. Any entity wishing to operate legally in the crypto sector must obtain the bank’s approval. Financial reporting, operational transparency, Know Your Customer procedures, and anti-money laundering inspections are all expected components of compliance.

Penalties and legal consequences

For unlicensed cryptocurrency activity, the draft law suggests fines and jail time. Unregistered digital currency providers risk fines of up to 300,000 roubles (about $4,000 USD) and up to four years in jail. Fines might reach one million roubles (approximately 13,000–13,500 USD) if the action is planned or involves substantial amounts of money. Larger operations and coordinated efforts are the focus of these actions.

By legally adding unlawful the digital currency activity to the criminal code, the measure shifts violations from a regulatory grey area into criminal law and imposes tougher penalties. Coordinated operations that produce substantial revenue or cause serious harm are subject to harsher penalties. In certain situations, criminals may be sentenced to seven years in jail, five years of forced labour, and additional fines.

Why Russia is tightening crypto regulations

Russia’s attempts to preserve its financial independence and international sanctions are intimately linked to its push for stricter cryptocurrency regulation. Digital assets have emerged as a substitute method of transferring money outside of conventional channels due to restricted access to international systems such as SWIFT.

Recent data shows that state-driven crypto transactions surged by 694% in 2025, highlighting how digital assets are being used as a substitute for conventional banking. While this growth underscores their usefulness, it also raises concerns about misuse and illegal activities. In response, the government is moving to bring cryptocurrencies under a clearer legal framework and increase oversight.

The rise in criminality associated with digital assets is another element motivating legislation. Cases of fraud, money laundering, and darknet activities have demonstrated how cryptocurrency may be abused. The scope of the issue was highlighted by platforms like Hydra, which enabled billions of illegal transactions before being shut down.

Russia’s broader crypto policy in 2026

A larger effort to regulate the bitcoin industry includes this new regulation. Russia passed legislation outlawing illicit cryptocurrency mining earlier in 2026, with fines and a maximum five-year prison sentence as punishments. When taken as a whole, these actions demonstrate a clear and intentional attempt to increase control over various facets of the cryptocurrency ecosystem, including as mining, trading, and associated services.

Instead of completely banning cryptocurrency, Russia is taking a different approach by tightening regulations and allowing transactions only through authorised intermediaries. Retail investors can still buy digital assets, but they must do so via approved channels. Overall, the focus is on controlling and regulating the market rather than shutting it down entirely, with clear rules about who can participate and how transactions should take place.

Russia’s approach to cryptocurrency legislation is still uncertain because lawmakers are still debating how to govern digital assets. Legislative review is still influencing the general direction of policy, even though authorities have stated that they will take a stronger stance against unauthorised activity. Changes are expected as the bill moves through parliament before it becomes law.