Russia Introduces Bill to Criminalize Unregistered Crypto Services

Russia's government submitted legislation to the State Duma on April 17, 2026, that would criminalize cryptocurrency services operating without Bank of Russia authorization, imposing penalties of up to 4 years in prison and $4,000 fines for individuals, and up to 7 years imprisonment for organized groups. The move targets an estimated $129 billion in annual cryptocurrency transactions that currently escape state control, with Russian traders paying approximately $15 billion yearly in fees to foreign platforms. However, the Russian Supreme Court opposes the bill as premature and insufficiently justified, recommending authorities wait until new digital currency legislation takes effect in July 2026 before pursuing criminal penalties. The Bank of Russia is simultaneously developing a framework to allow traditional exchanges to integrate crypto services without additional licenses.

Criminal Penalties for Unregistered Crypto Services

• ▪The Russian bill targets actors carrying out activities related to the organization of digital currency circulation without authorization from the Bank of Russia
• ▪The Russian bill provides for fines of up to 1 million rubles, approximately $13,100, for unregistered crypto services
• ▪Individuals offering unregistered cryptocurrency services in Russia face up to 4 years in prison and a $4,000 fine under the proposed bill
• ▪Russia initiated a legislative offensive in March 2026 targeting cryptocurrency miners operating illegally
• ▪Organized groups offering unregistered cryptocurrency services in Russia face up to 7 years imprisonment or 5 years of forced labor under the proposed bill
• ▪The Russian government submitted a bill to the State Duma to criminalize unregistered crypto services on Friday, April 17, 2026

Institutional Concerns and Timeline Issues

• ▪The Russian Supreme Court views the bill to criminalize unregistered crypto services as premature
• ▪The Russian Supreme Court recommends waiting for the entry into force of the law on digital currency and digital rights, expected in July 2026, before initiating criminal prosecution for unregistered crypto services
• ▪Russia expects a law on digital currency and digital rights to enter into force in July 2026
• ▪The Russian Supreme Court considers the bill to criminalize unregistered crypto services insufficiently justified to warrant criminal penalties

Capital Flight and Economic Motivations for Regulation

• ▪The Bank of Russia and the Russian government are working on a legal framework that would allow brokers and traditional exchanges to integrate crypto without additional licenses
• ▪According to Russian government estimates, $129 billion in cryptocurrencies escape state control in Russia every year
• ▪The Moscow Exchange generates only $1 billion in annual profits
• ▪Daily cryptocurrency transaction volume in Russia reaches 50 billion rubles, totaling more than 10,000 billion rubles over the year
• ▪Fees paid by Russian traders to foreign or offshore cryptocurrency platforms approach $15 billion per year

Perspective of Russian Supreme Court

• ▪The Russian Supreme Court advocates for delaying criminal prosecution until the digital currency framework is established in July 2026
• ▪The Russian Supreme Court believes criminal penalties for unregistered crypto services lack sufficient justification at this time

Perspective of Russian government and Bank of Russia

• ▪The Russian government sees unregistered crypto services as enabling $129 billion in annual cryptocurrency transactions to escape state oversight
• ▪The Bank of Russia is developing a framework to allow traditional brokers and exchanges to offer crypto services without additional licensing requirements
• ▪Russian authorities view the $15 billion in annual fees paid to foreign crypto platforms as lost revenue that should benefit domestic institutions