Russian Central Bank Proposes Criminal Liability for Unlicensed Crypto Exchanges

Russia plans criminal liability for unlicensed crypto exchanges.

The Central Bank of Russia plans to introduce criminal liability for operating in the cryptocurrency market without a license. The regulations will affect exchanges, brokers, and exchangers, stated Deputy Chairman Vladimir Chistyukhin during a broadcast on Radio RBC.

“If an individual offers professional services related to cryptocurrencies without any license […], criminal liability may be established,” the official noted.

Regarding administrative offenses, Chistyukhin clarified that the main burden will fall on financial intermediaries. In other words, the party providing the illegal service will be punished.

These regulations are planned to be introduced as part of the draft law “On Digital Currency and Digital Rights.” On April 1, the government submitted the document to the State Duma: it outlines the licensing of cryptocurrency market participants, the introduction of limits for unqualified investors, and de-anonymization procedures.

Cash Transactions Prohibited

In the discussion, Chistyukhin also mentioned that cryptocurrency exchange in the country will only be possible for non-cash money. There are no plans to create a mechanism for converting digital assets into cash in Russia.

“We assume that all operations should be conducted in a cashless manner. But I mean payment in fiat currency,” he emphasized.

Responding to a question about “offices in Moscow City,” the Deputy Chairman of the Central Bank stated that the authorities want to provide an opportunity for market participants, currently outside the legal framework, to legalize their activities.

According to him, the conditions for obtaining a crypto exchange license are “quite simple”: a small capital, requirements for founders and management, establishing an anti-money laundering control system, and minimal reporting.

Asset Storage Permitted

Chistyukhin clarified that the draft law does not prohibit Russians from storing assets in non-custodial wallets. In the future, they can be declared for legal transactions.

However, withdrawing coins from official Russian cryptocurrency depositories and exchanges will only be possible to custodial wallets.

“From the perspective of complying with AML/CFT rules, we want them to be as transparent as possible, and for Russian infrastructure and intermediaries not to put themselves at risk,” he noted.

“No one prohibits” individuals and legal entities from continuing to hold digital assets “in foreign wallets,” but they must be declared to the tax authorities, the official reminded.

“All cryptocurrency currently held by Russian individuals […] will remain unchanged. It will continue to belong to the Russian resident. There is no punishment for its possession, nor any restrictions on its use,” Chistyukhin emphasized.

Back in February, the Ministry of Finance, together with the Central Bank and federal executive authorities, developed a concept for tokenizing real-world assets.