Moscow is proposing new legislation that would impose significant monetary penalties and potential asset forfeiture for cryptocurrency payments and unauthorized digital currency mining operations.
Industry observers are expressing concern that the proposed rules will negatively impact legitimate businesses, potentially driving them to relocate and hindering the development of a domestic cryptocurrency industry within Russia.
Russia Considers Million-Ruble Fines for Digital Currency Activities
According to reports in the local media, citing a newly proposed bill, the Russian government is preparing to levy substantial fines on core cryptocurrency activities.
The draft of the federal law titled “Amendments to the Code of Administrative Offenses” has recently been submitted for review to the State Duma, the lower chamber of the Russian parliament.
This legislation, introduced by the Ministry of Digital Development, seeks to establish legal accountability for actions related to cryptocurrency use and mining, with penalties including fines and the possible seizure of digital assets.
Individuals and organizations accepting cryptocurrency as payment for goods or services would be subject to penalties under the proposed law, facing substantial financial penalties.
For private individuals, these fines could range from 100,000 to 200,000 rubles (approximately $2,500), while officials could face fines of 200,000 to 400,000 rubles ($5,000). Legal entities could be penalized with fines ranging from 700,000 to 1 million rubles (around $12,500).
The legislation also includes provisions allowing authorities to confiscate the cryptocurrencies involved in such transactions, as highlighted by the Russian crypto news outlet Bits.media earlier this week. Their report also emphasized that:
“Particular focus is being given to the mining of digital assets.”
If approved in its current form, unauthorized mining activities, including participation in mining pools, could result in fines ranging from 100,000 to 200,000 rubles (up to $5,000) for individuals. Businesses could face fines of between 1 million and 2 million rubles (close to $25,000).
The sponsors of the bill suggest that failure to report mining revenues and their origins to the relevant government bodies would lead to similar penalties.
These recent proposals follow an earlier legal initiative from the Russian government, which recognized cryptocurrency as property under the criminal code, effectively authorizing the seizure of digital assets during criminal investigations.
New Russian Regulations Target Cryptocurrency Transactions
Despite authorizing the use of cryptocurrencies for international transactions to circumvent Western sanctions, financial regulators in Russia, especially the central bank, remain opposed to the unrestricted circulation of cryptocurrencies within the country’s economy.
The initial ban on domestic cryptocurrency payments and their advertising was implemented through amendments to the law titled “On Digital Financial Assets.” Notably, this law, when originally enacted in 2021, did not address decentralized cryptocurrencies.
As noted in a related article by Bits.media, the Bank of Russia was subsequently granted the authority to prohibit cryptocurrency transactions at its discretion during a review of the legislation, which also legalized Bitcoin mining in 2024.
The authors of the newest bill have included a prohibition on the “illegal organization of digital currency circulation,” warning about the potentially broad interpretations and potential for abuse by authorities that this vague wording could enable.
The prohibition may deter businesses considering cryptocurrency-related activities, pushing them to relocate to more welcoming jurisdictions where they would contribute through taxes, job creation, and infrastructure development.
The website further argued that Russia would fail to gain regulatory experience, and the protections for cryptocurrency users’ rights would remain inadequate. Furthermore, as typically occurs, only legitimate businesses will comply with the ban, which is unlikely to affect less scrupulous entities.
The restrictions will hinder the progress of significant cryptocurrency ventures in the nation. The scarcity of opportunities in the industry could lead to a departure of skilled professionals. Russia will be forced to rely on solutions developed abroad instead of selling its own solutions to other countries.
“These bans will not eliminate cryptocurrencies; they will only curtail Russia’s opportunities in the promising field of fintech,” concludes Ivan Tikhonov, the founder of the prominent crypto portal.