Russian Parliament Pushes Forward Cryptocurrency Legislation That May Enable Criminal Prosecution
Russia's State Duma approved initial reading of cryptocurrency regulation legislation requiring licensed intermediaries, with major provisions scheduled to become enforceable in July 2026 and July 2027.
On Tuesday, Russia's State Duma approved a legislative proposal in its initial reading that would establish the nation's fundamental legal structure for digital currencies, bringing Moscow one step closer to implementing a framework that directs cryptocurrency transactions through intermediaries holding licenses under the supervision of the Bank of Russia.
Draft legislation No. 1194918-8, bearing the title "On Digital Currency and Digital Rights," successfully cleared its first reading in the State Duma on Tuesday, as confirmed by parliamentary documentation.
Should the draft legislation be enacted into law, it would permit Russian citizens to purchase and sell cryptocurrency via authorized intermediaries starting as soon as July, while simultaneously prohibiting platforms without licenses from operating beginning in July 2027.
This legislative proposal represents one component of a broader comprehensive package of laws designed to confine cryptocurrency trading to platforms that operate under regulation in Russia, in conjunction with no fewer than three additional related legislative measures that have been introduced. Among these companion bills, legislation No. 1194929-8 also successfully cleared the first reading on Tuesday.
When considered collectively, these legislative measures would guide Russia's cryptocurrency marketplace toward a framework based on licensing and state monitoring, although critical enforcement components remain outstanding.
Key provisions of the bill
Legislative proposal 1194918-8 "On Digital Currency and Digital Rights," would establish restrictions on investment amounts for individual retail investors, permitting acquisitions exclusively of "the most liquid digital currencies," according to definitions established by the Bank of Russia.
These qualifying assets would need to satisfy multiple criteria, including maintaining an average market capitalization exceeding 5 trillion rubles ($66.6 billion) during the two-year period preceding their listing, demonstrating average daily trading volumes surpassing 1 trillion rubles ($13.3 billion) throughout that identical timeframe, and possessing a trading record spanning no less than five years.
Under the proposed legislation, retail investors would face mandatory testing requirements and encounter purchase limitations through any single intermediary of 300,000 rubles ($4,000) annually.
The proposed law would additionally permit Russian residents to acquire cryptocurrency internationally via foreign financial accounts, contingent upon disclosure of such transactions to taxation authorities.
The proposed legislation would also preserve a stringent ban on utilizing cryptocurrency for payments, representing a fundamental element of the cryptocurrency law "On Digital Financial Assets," which became operational in 2021.
Supreme Court says criminal bill is premature
Beyond the pair of draft legislative measures that successfully passed their initial reading, legislators have put forward two additional proposals that would establish liability frameworks and criminal sanctions for violations of the proposed regulations, encompassing bills No. 1194944-8 and No. 1209607-8.
The second of these introduces criminal sanctions targeting unlicensed digital asset service provision and requires registration procedures with the Bank of Russia, establishing monetary penalties and imprisonment sentences for failure to comply.
However, the Supreme Court has refused to endorse this particular measure in its present formulation, indicating that the proposal relies upon a more extensive digital currency regulatory framework that remains unadopted and consequently appears to be introduced prematurely.
"The proposed article is drafted as a blanket provision, the application of which is not possible in isolation from rules directly established by regulatory acts," the court said in an official review of the bill released last week, adding:
"Meanwhile, the draft federal law 'On Digital Currency and Digital Rights,' aimed at regulating issues related to the organization of digital currency circulation, is currently under development. Until the relevant federal law is adopted, the initiative in question appears premature."
This indicates that Tuesday's initial-reading approval holds significance primarily because it progresses the foundational legislation upon which additional enforcement mechanisms continue to depend.
Numerous domestic industry stakeholders have consistently cautioned that the proposed regulatory framework risks producing unintended consequences, potentially driving the industry deeper underground rather than successfully transitioning it from operating in the grey zone.