The Russian government has escalated its crackdown on unregulated crypto activity, submitting a draft law to the State Duma that would make operating unregistered digital-asset services a criminal offense.
What the bill proposes
- The draft (cited as 0037822-UCH-2026 (7.1)) would add a new Article 1717 to the criminal code, targeting organizations that organize or circulate cryptocurrencies and other digital assets without registration or a mandatory license from the central bank.
- Penalties include fines of up to about $4,000 and prison terms of up to four years for individuals running unlicensed digital-asset operations.
- If the offense is committed by an organized group or involves large-scale damage or profit, punishments rise to compulsory labor for up to five years or imprisonment for up to seven years.
Enforcement and legal scrutiny
If enacted, criminal investigations under the new rule would be handled by the Investigative Committee and the Federal Security Service (FSB). However, the Supreme Court has already flagged problems: it refused to accept the bill in its current form, saying the explanatory note does not offer a “reasoned justification” for imposing criminal penalties for illegal crypto circulation.
Context — part of a broader regulatory tightening
This proposal follows several other measures introduced in March and recent legislation that narrows retail access to crypto. Key existing and proposed restrictions include:
- Criminal penalties targeted at illegal crypto mining and operators of mining infrastructure.
- New retail rules limiting “non-qualified” retail investors to roughly ₽300,000 (~$3,700) in annual crypto purchases per broker or intermediary.
- “Qualified” investors must pass assessments and trade only through authorized platforms.
- Banks are prohibited from processing payments to unlicensed foreign crypto platforms.
Reaction and implications
Taken together, these bills reflect a push to centralize crypto activity through licensed, regulated intermediaries and to harden enforcement. That stance has drawn criticism from parts of the crypto community, which argue the measures are overly strict and could stifle innovation and access. With the Supreme Court requesting clearer justification, the final shape of the law — and how aggressively it will be applied — remains uncertain.
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