[DigitalToday reporter Yoonseo Lee] Russia has moved to push legislation to criminally punish cryptocurrency trading conducted outside its domestic regulatory framework.

On April 14 (local time), Interfax reported, citing blockchain outlet Cryptopolitan, that the Moscow city government approved a draft to introduce criminal liability for illegal circulation of digital assets. The draft includes penalties of up to 7 years in prison and a fine of up to 1 million roubles (about 20 million won).

The draft is designed to add a new provision to Russia's criminal code. It would specify as a punishable act the organising of cryptocurrency circulation without registration or a licence from the Bank of Russia. Russia's finance ministry said the bill was prepared as part of the government's plan to bring several sectors, including the crypto market, out of the black market.

Penalties would vary depending on the scale of the violation and whether it was organised. In relatively minor cases, a fine of 100,000 to 300,000 roubles (about 2 million to 5.9 million won) could be imposed, or an amount equivalent to up to 2 years of income. In such cases, imprisonment of up to 4 years or forced labour would also be possible. If an organised crime group was involved, or there was large property damage and substantial illegal profit, penalties would be significantly increased.

If found guilty, penalties could include up to 7 years in prison, up to 5 years of forced labour and a fine of up to 1 million roubles. The draft also includes an option to calculate the fine based on up to 5 years of wages or other income.

The bill also sets thresholds for the scale of damage. More than 3.5 million roubles (about 68 million won) would be treated as significant property damage or proceeds, and more than 13.5 million roubles (about 260 million won) as large-scale damage or proceeds. Preliminary investigations of criminal cases under the new provision would be handled by the Investigative Committee of Russia and the Federal Security Service (FSB).

Russia's legal community is also explaining the scope of the measure. Vladimir Gruzdev (블라디미르 그루즈데프), chairman of the board of the Russian Bar Association, described it via the economic portal RBC as "activities that organise the circulation of digital assets in violation of domestic laws". The bill's wording also defines the target of criminal liability as responsibility for "organising the circulation of digital assets without registration or a licence from the Bank of Russia".

The measure follows a recent package of comprehensive cryptocurrency regulation legislation released by the Russian government. The package includes a draft "law on digital currency and digital rights" and would introduce a licensing system for crypto exchanges and custodians, while setting rules for coin trading and investment. It also includes a provision to broaden access to non-qualified investors.

The implementation timeline is planned in stages. The comprehensive regulatory bills are expected to be adopted and take effect by July 1, 2026. The criminal punishment provision is expected to take effect from July 1, 2027, giving Russia a "dual structure" that binds permissible trading within the system while applying criminal penalties to trading outside regulation.

Expectations and concerns are mixed among the market and investors. Some assessments say Russia's decentralised digital asset policy is at a turning point, while critics see the new system as potentially excessive. Russia is also said to be preparing measures to restrict access to global exchanges and is pursuing a plan to require Russians to report overseas cryptocurrency wallets to the Federal Tax Service.

Public opinion was divided. A survey by crypto outlet Bits.media found about one-third of Russians said cryptocurrencies should be recognised and regulated as property, like real estate or bank deposits. A similar share worried the new regulations could excessively strengthen government control. Even so, 36 percent of all respondents said they were willing to invest in cryptocurrencies.

The Russian government is accelerating legislation to bring cryptocurrencies into the system while also tightening control over unlicensed trading and overseas custody structures. Future attention is expected to focus on how broadly exchange licensing and overseas wallet reporting obligations are applied in practice, and how specific the criminal provisions become during the legislative process before they take effect in 2027.