- Russians trade $648 million per day in unregulated markets.
- Ordinary offenders could be jailed for four years, fined $1,300.
- Proposal could come into force in July 2027.
Buying and selling crypto in Russia without a central bank-issued operating permit will land you in a forced labour camp for up to seven years — if the Kremlin gets its way.
Private individuals who buying and selling coins without permission in Russia will also face criminal punishment under the government’s proposals.
“This bill proposed to introduce criminal liability for carrying out activities related to the organisation of digital currency circulation without registration or without a special permit,” the government wrote in a draft bill published on the State Duma’s website.
Crypto trading is still almost entirely unregulated in Russia. But the government wants to change all that in the weeks ahead, and is determined to bring the crypto sector, worth an estimated $648 million a day, under its legal umbrella as early as June.
No grey areas
The government plans to force most Russian crypto traders to buy and sell crypto via commercial bank apps, essentially doing away with the country’s grey-area crypto exchanges.
At the heart of the proposed bill is a clause stipulating that the “organised” selling of cryptocurrencies “without a central bank license” constitutes as criminal offence.
The government says this will help boost transparency in the crypto markets and “reduce the risk of financial crime.”
If adopted, the bill will oblige courts to hit “ordinary” offenders with a minimum fine worth $1,300, capping the size of fines at around $4,000.
Judges will also be able to punish these offenders with forced labour camp jail terms of up to four years.
But for the operators of larger crypto exchanges, the cap on fines will be $13,000, with courts instructed to jail executives for up to five or seven years.
The bill also contains clauses pertaining to crypto miners, including penalties for industrial miners who fail to declare their activities to the state.
Policing overseas trading
While the bill may seem draconian to some, it is a far crypto from an earlier government proposal unveiled in the State Duma on April 1, as reported by Russian media outlet Expert.
In addition to similar criminal penalties, the earlier proposal would have required all Russian residents to notify the Federal Tax Service if they opened or closed crypto wallets held in overseas locations within the space of a month.
The earlier bill also proposed forcing all Russia-based users of overseas crypto exchanges to report all of their transactions to the same tax body.
Both bills would require the approval of the State Duma and the offices of the President. If approved, they would come into effect on July 1, 2027.
Tim Alper is a News Correspondent at DL News. Got a tip? Email him at tdalper@dlnews.com.
