Russia Set to Criminalize Unlicensed Crypto Services Operations

• Russia plans to criminalize unlicensed crypto services, with fines and prison terms for violations.
• Supreme Court warns proposal is premature due to pending digital currency laws and legal gaps.
• Bill expands regulatory scope, granting central bank oversight across broader crypto activities.

Russia’s State Duma received a draft bill Friday that would criminalize unlicensed crypto services, introducing prison terms and fines for violations. Lawmakers aim to regulate digital currency circulation through the Bank of Russia. However, the proposal has drawn criticism from the Supreme Court over timing, as foundational crypto laws remain pending and unresolved.

Bill Targets Unlicensed Crypto Operations

According to the draft, individuals running unregistered crypto services could face fines up to $4,000 and four-year prison sentences. However, harsher penalties apply when organized groups engage in such activities. In those cases, offenders could receive up to seven years in prison or five years of compulsory labor.

Additionally, courts may impose financial penalties reaching one million rubles, roughly $13,100. These fines can also reflect a portion of income earned over five years. The bill specifically targets any entity facilitating digital currency circulation without central bank approval.

Supreme Court Raises Concerns on Timing

However, Russia’s Supreme Court has criticized the proposal, calling it premature. The court stated the bill lacks sufficient justification for imposing criminal penalties at this stage. It also warned that enforcement before the Digital Currency law takes effect could create legal inconsistencies.

Notably, the foundational legislation is scheduled to come into force in July. Therefore, applying criminal liability beforehand could complicate enforcement frameworks. The government has not publicly addressed these concerns.

Broader Regulatory Push Expands Scope

Meanwhile, this proposal builds on earlier legislation introduced in March targeting illegal crypto mining activities. That earlier package focused on miners and infrastructure operators. Now, the scope expands to include all unlicensed digital asset service providers.

If passed, the Bank of Russia would gain authority to license and oversee crypto-related activities. Investigations would involve the Investigative Committee and the Federal Security Service. As a result, enforcement mechanisms would extend across the broader digital asset sector.

The post Russia Set to Criminalize Unlicensed Crypto Services Operations appears on Crypto Front News. Visit our website to read more interesting articles about cryptocurrency, blockchain technology, and digital assets.