The Russian government has filed a bill imposing heavy fines and asset seizure for cryptocurrency payments and coin mining without permission.
Critics say the legislation will hurt legal businesses, chasing them away to other jurisdictions and depriving Russia of the opportunity to develop its own crypto infrastructure.
Russia readies million ruble fines for coin payments and minting
The executive power in Moscow is preparing to hit key crypto activities with hefty fines, local media reported, citing a new legislative proposal.
The draft federal law “On Amendments to the Code of Administrative Offenses” has been recently submitted to the State Duma, the lower house of parliament.
The bill filed by the Ministry of Digital Development introduces liability for violations related to the use and mining of cryptocurrencies, punishable by monetary penalties and even seizure.
Persons accepting cryptocurrency for goods and services will be held accountable under the legislation, which suggests slapping them with hefty fines.
These range from 100,000 to 200,000 rubles (almost $2,500) for private citizens, 200,000 to 400,000 rubles ($5,000) for officials, and 700,000 to 1 million rubles ($12,500) for legal entities.
Provisions allow authorities to confiscate the coins involved in all such cases, leading Russian crypto news outlet Bits.media unveiled this week. Its report also noted:
If lawmakers approve the current texts, illegal mining activities, including participation in mining pools, will be met with 100,000 – 200,000-ruble fines (up to $5,000) for individuals, while companies may have to pay the state between 1 million and 2 million rubles (almost $25,000).
Failure to report mining profits and their sources to respective government agencies should result in the similar penalties, according to the sponsors.
The latest amendments come after an earlier Russian government legislation submission recognizing cryptocurrency as property under the country’s criminal code, effectively legalizing crypto seizure within criminal proceedings.
New Russian law targets basic cryptocurrency transactions
Financial regulators in Russia, particularly the central bank, remain opposed to permitting the free circulation of cryptocurrencies in the country’s economy, despite authorizing their use in international settlements under Western sanctions.
Domestic crypto payments, including their advertising, were first banned with amendments to the law “On Digital Financial Assets,” which did not deal with decentralized cryptocurrencies when it was originally enforced in 2021.
Then, the Bank of Russia was granted powers to ban crypto transactions at will through provisions added during the review of the legislation, which legalized Bitcoin mining in 2024, Bits.media recalled in another article.
The authors of the latest bill have sneaked in a ban on the “illegal organization of digital currency turnover,” it noted, warning about the likely consequences of the wording that allows for broad interpretation and abuse by officials.
The prohibition will scare away companies planning to work with cryptocurrencies and force them to relocate to more favorable jurisdictions, where they will pay taxes, create jobs and develop infrastructure.
Russia will not be gaining regulatory experience, and the rights of cryptocurrency users will not be protected, the website elaborated. Besides, as it usually happens, only legitimate businesses will abide by the ban, which is unlikely to affect shady firms.
The restrictions will prevent the development of major crypto projects in the country, while the lack of opportunities in the industry will lead to an outflow of qualified professionals. Russia will have to rely on foreign-made solutions rather than selling its own to others.
“Cryptocurrencies, themselves, will not disappear due to these bans, only Russia’s opportunities in the promising area of fintech,” concludes Ivan Tikhonov, founder of the popular crypto portal.
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Source: https://www.cryptopolitan.com/russian-bill-threatens-crypto-with-fines/
