Russians Could Face Jail Time for Cryptocurrency Transactions

A new proposal in Russia suggests that cryptocurrency transfers and operations could soon be classified as illegal activities, carrying criminal penalties for those involved.

The initiative, reportedly backed by the Public Chamber of the Russian Federation, seeks to tighten control over the circulation of digital assets in the country. The organization has drawn a historical parallel to Article 88 of the Criminal Code of the RSFSR (1960), which criminalized unauthorized foreign currency transactions during the Soviet era. That law punished individuals for violating currency operation rules, and public activists are now calling for a modern equivalent aimed at cryptocurrencies.

According to the Public Chamber, billions of rubles’ worth of illicit funds are being stored and moved through cryptocurrencies, making digital assets a preferred tool for financial crimes, tax evasion, and shadow economy operations. Activists argue that the unregulated nature of crypto creates a “grey zone” that undermines state financial security.

The Chamber also proposed that the Federal Security Service (FSB) should oversee the enforcement of this new law. The suggested legislation would give the FSB the authority to monitor, investigate, and prosecute any illegal crypto operations, mirroring the strict oversight that existed during the Soviet period for foreign currency exchanges.

If adopted, this move would mark a significant step backward from the global trend of cryptocurrency legalization and regulation. While many countries are exploring frameworks to integrate digital assets into the economy, Russia’s approach seems to be heading toward prohibition and criminalization.

The proposal has sparked debate within Russia’s financial and tech communities. Critics argue that outlawing crypto will not eliminate its use but will drive it further underground, complicating efforts to monitor financial flows. Supporters, however, claim that strict measures are necessary to prevent money laundering, corruption.