Russia Declares the Death of Cryptocurrencies: End of the Golden Era of Crypto?

According to Rokna, local Moscow media reported the preparation of a bill that directly bans any form of cryptocurrency payment outside of a legal framework. The draft also criminalizes cryptocurrency mining, or “mining,” if conducted without a license, prescribing severe penalties for violators.

The draft federal law, “On Amendments to the Code of Administrative Offenses”, was recently submitted by the Ministry of Digital Development to the State Duma, the lower house of the Russian parliament.

Under this law, businesses involved in cryptocurrency mining and those accepting crypto payments in exchange for goods and services will be held accountable.

If approved by the Russian parliament, the bill would impose fines of up to 200,000 rubles (approximately 450 million tomans) for illegal mining activities, including individual participation in mining pools. For companies, the fines could reach as high as 2 million rubles, equivalent to about 2.25 billion tomans.

Ivan Tikhonov, an active figure in Russia’s cryptocurrency industry, reacted to the bill by stating: “Cryptocurrencies will not disappear because of these prohibitions. Instead, it is Russia’s opportunities in the promising field of financial technology that will vanish.”

The proposal is closely tied to Russia’s sanction-hit economy. In recent years, the country has increasingly turned to cryptocurrencies as a tool to bypass international financial restrictions. However, it now appears that the Kremlin, aiming for tighter control over financial flows and full supervision of cryptocurrency transactions, has declared illegal for citizens what the state itself may still employ.

According to analysts, such a level of stringency could stifle the broader environment for blockchain innovation in Russia and drive many industry players into underground activities.

A cryptocurrency-focused media outlet, commenting on the development, wrote: “This move is reminiscent of policies once implemented in countries like China, where the government sought to gain full control of the emerging crypto market by banning mining and restricting the free use of cryptocurrencies. However, experience has shown that such policies often result in shifting activities to informal sectors, with only limited impact on reducing actual cryptocurrency usage.”