Russia Targets Unlicensed Crypto Services with Harsher Penalties

Russia's State Duma has introduced a draft law that aims to make operating an unlicensed crypto service a criminal offense. The bill targets individuals or entities organizing digital currency circulation without prior approval from the Bank of Russia.

Unregistered operators could face fines of up to $4,000 and prison sentences of up to four years for individuals acting alone. Those penalties apply to members of organized groups as well. However, group offenses carry harsher consequences: up to seven years in prison or compulsory labor of up to five years.

Courts may also impose a separate financial penalty of up to 1 million rubles, roughly $13,100, or an equivalent portion of the convicted person's income over a period of up to five years. This legislation builds on a broader package introduced in March that proposed criminal liability specifically for unlicensed Bitcoin miners.

The new draft expands the scope to cover any unregistered digital asset service provider. Russia's Supreme Court has responded critically to the proposal, stating that it lacks 'reasoned justification' for imposing criminal liability at this stage and describing the measure as 'premature' until the country's pending Digital Currency and Digital Rights law comes into force in July.