Russia’s State Duma approves penalties of up to seven years for illegal crypto circulation

The State Duma has passed in first reading a bill that adds both administrative and criminal liability for violations of Russia’s crypto rules. For high-risk payment businesses, the key point is simple: the state is moving from policy language to enforcement language, with fines, forced labor, and prison terms now on the table.

1. The bill introduces a new article into the Code of Administrative Offenses, Article 15.29.1, titled “Violation of the requirements of legislation on the circulation of digital currency.” Under it, platforms can be fined for breaching limits applied to non-qualified investors. The proposed fines are from 30,000 rubles to 50,000 rubles for officials and from 700,000 rubles to 1 million rubles for legal entities.
2. It also adds Criminal Code Article 171.7, “Illegal organization of digital currency circulation.” This applies when illegal activity causes major damage to citizens, organizations, or the state, or when it generates income on a large scale. The proposed penalties are fines of 100,000 to 300,000 rubles, forced labor for up to four years, or imprisonment for the same term with a fine of up to 80,000 rubles.
3. For the same act committed by a group or involving especially large damage, the bill raises the ceiling to forced labor for up to five years or imprisonment for up to seven years, plus a fine of up to 1 million rubles. The draft defines major damage as 3.5 million rubles and especially large damage as 13.5 million rubles.
4. This is not the first step in the package. The main bill on crypto regulation in Russia passed first reading in April, and lawmakers still need to review it in second and third readings. The proposed framework would allow Russians to buy crypto legally through licensed intermediaries such as exchangers and brokers.
5. One more item to watch: the Finance Market Committee of the State Duma has proposed, by the second reading, to soften the ban on using cryptocurrency as a means of payment, according to Interfax. That detail matters because the line between “regulated circulation” and “payment use” is exactly where compliance teams tend to find trouble.