Russia Approves Criminal Penalties for Unlicensed Crypto Operations: What It Means for the Market

A New Criminal Statute for Crypto in Russia

Russia's government commission on legislative activities has approved provisions establishing criminal liability for unauthorized cryptocurrency operations, as reported by RIA Novosti. The initiative introduces Article 171.7 to the Russian Criminal Code, targeting the organization of digital currency circulation without Central Bank registration or licensing.

Deputy Central Bank Chairman Vladimir Chistyukhin had previously outlined the planned measures. Penalties are tiered by severity: the base offense carries fines up to 300,000 rubles, compulsory labor, or imprisonment for up to four years. Aggravating circumstances — such as organized group activity or especially large-scale damage — raise the maximum sentence to seven years and fines to 1 million rubles.

Large-scale damage is defined as amounts starting from 3.5 million rubles, while especially large-scale begins at 13.5 million rubles. The amendments will form part of the broader "On Digital Currency and Digital Rights" bill, which could take effect on July 1, 2026.

Why This Matters

Russia is making a definitive move to draw a clear line between legal and illegal crypto activity. Until now, cryptocurrency exchange and circulation occupied a regulatory gray zone — lacking explicit rules but also free from direct criminal sanctions. These new provisions fundamentally alter the landscape: market participants gain a path to legitimacy through licensing, while simultaneously facing criminal prosecution for operating without authorization.

For the global crypto industry, this signals that one of the largest countries by crypto transaction volume is building a rigid regulatory framework that will also reach foreign companies utilizing Russian infrastructure.

Who Faces Prosecution

Olga Zakharova, Director of the Legal Department at PLAN B, clarified that ordinary users conducting one-off crypto exchanges will not be affected. The statute targets systematic activity organizing digital currency circulation: providing accounting services for cryptocurrencies, facilitating transactions, and any other services supporting crypto circulation through Russian infrastructure.

According to Zakharova, at-risk entities include not just exchange services but any platforms that facilitate transactions or provide technical infrastructure. The law extends to foreign companies operating through Russian bank accounts, electronic money systems, or the national payment infrastructure.

The 3.5 Million Ruble Threshold: A Low Bar for Crypto

Ignat Likhunov, founder of legal agency Cartesius, highlighted a critical concern: the threshold for "large-scale" damage is remarkably low by cryptocurrency standards. He calculated that a single transaction involving 40,000–50,000 USDT could exceed the 3.5 million ruble mark, potentially triggering criminal liability even with margins as slim as 1%.

An additional risk stems from the "organized group" qualifier. Likhunov noted that virtually every exchange operation involves a small team — an operator, manager, director, and sometimes couriers. This organizational structure could be classified as a group of persons, automatically escalating charges to more severe categories with maximum sentencing.

The Regulatory Logic: From Gray Zone to Binary Framework

The experts consulted broadly agreed that criminal sanctions are not a standalone punitive measure but part of a comprehensive overhaul of cryptocurrency regulation. Andrey Tugarin, founder of GMT Legal, emphasized that the primary goal is to regulate entities organizing digital currency circulation — primarily crypto exchangers. In his assessment, Russia is transitioning from a gray zone to a clear binary system of legal and illegal activity, with no intermediate status. The new law will create a pathway for obtaining official licenses to operate with cryptocurrencies.

Likhunov supported this view, noting that criminal liability was always part of the same legislative package as licensing provisions. Zakharova similarly connected the amendments to the forthcoming base law "On Digital Currency and Digital Rights" and previously proposed changes to the Administrative Code regarding crypto exchanges and unlicensed mining.

Will Two Parallel Markets Emerge?

Likhunov identified the most critical question: where will the existing market go once licensing launches? Based on the framework bill and Central Bank representatives' comments, the regulator envisions a model involving digital depositories, brokers, operators, and licensed crypto exchangers.

However, several fundamental questions remain unanswered. It is unclear whether licensed participants will be permitted to work with USDT — currently the dominant asset in crypto-denominated transactions. Additional restrictions under discussion include a potential ban on cash-based operations and limits for unqualified investors.

Likhunov warned that if such restrictions are implemented, the legal segment may prove too narrow to meet actual business needs. For example, participants in foreign trade may find themselves unable to acquire cryptocurrency in the volumes required for settlements. The expert predicted the emergence of "two parallel worlds" — the existing unregulated market and a new licensed one.

For context, Russia approved an asset tokenization concept in February 2025.