Russia’s law criminalizing illegal cryptocurrency exchange will not be finalized before parliamentary elections, with second and third readings pushed to the new State Duma’s autumn session.
The head of the Duma’s Financial Markets Committee confirmed this week that the bill, which carries sentences of up to seven years for illegal crypto exchange, has been shelved until after elections conclude on 20th September.
Background: What the Law Would Do
The bill passed its first reading in early July and targets what Russian authorities define as the illegal organization of cryptocurrency circulation. In practical terms, that means any crypto exchange conducted outside Central Bank-registered and licensed institutions.
The penalties are structured by scale:
- Operating an unlicensed exchange carries fines of 100,000 to 300,000 rubles or an income equivalent, with up to four years imprisonment as an alternative.
- If an operation is run by an organized group or proceeds exceed 3.5 million rubles, sentences rise to five years with fines of up to one million rubles.
- The most serious provision allows sentences of up to seven years for those organizing large-scale illegal circulation.
- All penalties come into force on 1 July 2027, giving the industry time to adjust.
Why It Has Been Delayed
Anatoly Aksakov, head of the Duma Committee on Financial Markets, cited unresolved questions around how penalties should be calibrated. The State Duma’s spring session closes on 27 July. Deputies then take recess through August and September before elections, making autumn the earliest realistic window.
“The next State Duma will review all the arguments and adopt carefully crafted language to allow bona fide market participants to operate in peace while simultaneously establishing strict penalties for those who use cryptocurrencies for illegal transactions,” Aksakov said.
Key dates:
- Spring session ends 27 July
- Deputies are on recess throughout August and September
- Elections conclude on 20 September
- Autumn session is the earliest realistic window for the second and third readings
P2P Question
One of the most debated aspects of the legislation is how it treats ordinary peer-to-peer users. Concerns have circulated that the bill would expose individual P2P traders and small exchangers to criminal charges alongside organized illegal operations.
Aksakov dismissed those concerns as coming from opponents of market regulation. The current framework would permit Russians to buy and sell cryptocurrency only through Central Bank-registered entities. Direct trades between individuals outside licensed infrastructure would carry criminal liability. Provisions specifically affecting individuals are still being negotiated.
Broader Regulatory Framework
Under the framework being built:
- Russians would only be permitted to buy and sell crypto through Central Bank-registered entities.
- Direct P2P transactions between individuals outside licensed infrastructure would carry criminal liability.
- The penalty structure mirrors existing Russian financial market regulations for unlicensed activity.
A companion bill, the government’s On Digital Currency and Digital Rights legislation, which establishes broader state control over crypto transactions, has also slipped. Originally promised for 1 July, then rescheduled to 1 September, it now faces similar uncertainty around the election period.
Related: Russia Moves to Monitor Every Crypto Transaction Above 60,000 Rubles
