Russian authorities may soon introduce penalties for people involved in unauthorized turnover of cryptocurrencies in the country.
According to Russia’s chief prosecutor, the measures to curb such activities are going to include a mechanism for the seizure of traded coins.
Russian state to penalize citizens transacting with crypto
Russia is considering ways to discipline those organizing the circulation of digital currencies outside the law, the nation’s Prosecutor General, Alexander Gutsan, announced at a summit with counterparts from the region.
Quoted by the official Russian news agency, TASS, the high-ranking legal representative of the government in Moscow stated:
“Legislative amendments are currently being developed to establish penalties for the illegal organization of digital currency circulation, the procedure for its confiscation, and its transfer to the state.”
A legal framework has been created, with the help of prosecutors, to “control digital currency and its mining, as well as to combat money laundering through virtual assets,” Gutsan elaborated.
“Mechanisms have been established to track transactions with corruption, terrorism, and extremism implications, as well as those related to drug trafficking,” he further noted.
Gutsan made the comments during a meeting of the Coordinating Council of Prosecutors General of the member countries of the Commonwealth of Independent States (CIS). The latter was created after the dissolution of the USSR to maintain cooperation between former Soviet republics.
At the same time, the head of the Russian Prosecutor General’s Office emphasized that the development of the digital economy, including the turnover of cryptocurrencies, is becoming increasingly important.
Russia’s ‘crime and punishment’ approach to regulating crypto
The Russian Federation is yet to properly regulate its cryptocurrency space, which has until now largely existed in a legal vacuum, with few exceptions.
The law “On Digital Financial Assets” (DFAs), which went into force in early 2021, is pretty much the only legal act that barely scratches the surface of crypto regulation, aside from the recognition of cryptocurrency as property within court proceedings and criminal cases.
A new attempt to grant Bitcoin the same status under Russia’s Family Code is underway, but it still needs the support of the executive and legislative powers in Moscow.
The DFA law mainly deals with tokenized “real-world assets” of the kind issued on private blockchains by state-licensed entities, and if anything, confirms the status of the Russian ruble as the only acceptable means of payment in the country.
A digital version of the constitutional legal tender will be introduced in stages, starting next September, as reported by Cryptopolitan. As the latest incarnation of Russian money, the digital ruble is likely to be the only digital currency that can be used to pay for goods and service.
Officially, crypto payments are currently a viable option only for some Russian companies, and within a special “experimental legal regime” (ELR) that allows Russia’s importers and exporters to use coins in international settlements, circumventing Western sanctions over Moscow’s invasion of Ukraine.
The ELR also allows a small group of “highly qualified” investors to buy and sell crypto assets. The Central Bank of Russia (CBR) wants to keep this category as narrow as possible.
But the Ministry of Finance (Minfin) has been pushing for wider investor access to cryptos such as Bitcoin (BTC), and Russian officials recently indicated comprehensive rules, at least for crypto investment, are coming in 2026.
Meanwhile, the unregulated, unauthorized segment of the Russian crypto market has been growing as well, despite efforts to restrict it, including legislative amendments targeting peer-to-peer trading and measures such as restricting cash withdrawals and blocking bank cards used in “suspicious transactions.”
According to some recently announced estimates, around 20 million Russians are already using cryptocurrency, one way or another, with holdings in Russian crypto wallets currently exceeding $40 billion in fiat equivalent.
A proposal to criminalize crypto transactions, floated this week, has evoked memories of currency restrictions enforced in Soviet times, when payments in another country’s fiat and foreign exchange were punishable by lengthy prison sentences.
