Russia has approved new criminal penalties for illegal cryptocurrency transactions, targeting unregistered digital currency activities.
The Russian government has taken a significant step towards regulating the cryptocurrency market by approving provisions that establish criminal liability for illegal cryptocurrency transactions. This development was reported by RIA Novosti.
A new article in the Criminal Code, Article 171.7, has been proposed, which will penalize the unauthorized organization of digital currency circulation. This includes activities related to digital currencies that are conducted without proper registration or a license from the Bank of Russia.
According to Deputy Chairman of the Central Bank, Vladimir Chistyukhin, the new measures aim to address illegal activities in the cryptocurrency space. Penalties will vary depending on the damage caused, with fines reaching up to 300,000 rubles or imprisonment for up to four years for basic offenses. In cases involving aggravating circumstances, penalties could increase significantly, with fines up to 1 million rubles and imprisonment extending to seven years.
The amendments will be part of the "On Digital Currency and Digital Rights" bill, expected to be enacted by July 1, 2026.
Impact on Cryptocurrency Exchanges
Experts indicate that the penalties will primarily target organizations involved in the circulation of digital currencies, rather than individual users conducting one-off transactions. Olga Zakharova, director of the legal department at PLAN B, highlighted that not only exchanges but also any service facilitating cryptocurrency transactions will be impacted. This includes foreign companies utilizing Russian banking infrastructure.
Ignat Likhunov, founder of the legal agency Cartesius, pointed out that the relatively low threshold of 3.5 million rubles for defining significant damage poses a risk for exchanges, as even minor profit margins could exceed this limit. He noted, "If an exchange buys 40,000 USDT and sells it at a 1% profit, they could easily breach the threshold for criminal liability." Additionally, the structure of most exchanges, often operating with multiple personnel, could lead to more severe charges under the new law.
Regulatory Objectives
Experts agree that these measures are not merely punitive but are part of a broader effort to integrate the cryptocurrency market into a regulated framework. Andrey Tugarin, founder of GMT Legal, emphasized that the legislation aims to formalize the activities of cryptocurrency organizers and exchanges, moving the market away from a gray area towards a clearly defined legal status. Likhunov echoed this sentiment, stating that the introduction of criminal liability follows a logical progression in regulatory efforts.
Future of the Cryptocurrency Market
The introduction of licensing could significantly reshape the existing cryptocurrency landscape. Likhunov raised concerns about whether licensed participants would be able to engage with major cryptocurrencies like USDT, as restrictions are still under discussion. Potential limitations could include bans on cash transactions and restrictions for non-qualified investors, which may narrow the legal market's ability to meet business needs.
Likhunov concluded that without clarity and flexibility in regulations, two parallel markets could emerge: one that operates under current conditions and another that is strictly licensed.
