Russia is significantly tightening its grip on the digital asset landscape. A new bill submitted to the State Duma aims to introduce strict criminal liability for any individual or entity providing cryptocurrency services without explicit authorization from the Bank of Russia. This legislative push comes at a turbulent time for the local industry, following a massive $14 million hack of the sanctioned Russian exchange, Grinex.
New Penalties: Fines and Prison Time for Unlicensed Crypto Operators
The proposed legislation targets the “organization of digital currency circulation,” making it a criminal offense to operate without a license or registration from the central bank. The stakes for non-compliance are high; individuals found operating outside the law could face fines of up to $4,000 and a prison sentence of up to four years.
For those operating as part of an organized group or those who generate significant illegal income through these services, the penalties escalate sharply. The bill suggests:
-
Compulsory labor for up to five years.
-
Prison sentences of up to seven years.
-
Fines reaching 1 million rubles ($13,100) or the equivalent of five years of the defendant’s salary.
This bill expands on previous proposals from March that specifically targeted illegal crypto miners, signaling a broader intent by the Russian government to bring the entire ecosystem under state oversight.
Legal Pushback and the Grinex Exchange Security Breach
Despite the government’s momentum, the Russian Supreme Court has expressed reservations. In a statement reported by RBC, the court called the criminal measures “premature,” arguing that there is currently a lack of “reasoned justification” for such harsh penalties. The court suggested that these measures should wait until the “Digital Currency and Digital Rights Law” is fully enacted, which is expected to happen this July.
While lawmakers debate the legal framework, the industry is dealing with immediate security threats. The sanctioned Russian crypto exchange Grinex recently halted all trading activities after a devastating hack. The platform lost over 1 billion rubles (approximately $13.7 million), an attack the company attributes to “entities of hostile states.”
Grinex has since filed a formal criminal complaint and handed over digital evidence to law enforcement. Between the looming threat of prison time for operators and the constant risk of high-level cyberattacks, the Russian crypto market is entering its most regulated and volatile era yet.
