Russia, Complete Ban on Personal Wallet Withdrawals..."7 Years in Prison for Violations"

▲ Russia, Bitcoin (BTC)

Russia has introduced a comprehensive regulatory framework to fully control the cryptocurrency market, embarking on a reorganization of the global digital asset order.

According to U.Today, a cryptocurrency specialized media outlet, on May 4 (local time), Russia submitted a large-scale bill in April containing definitions and operational standards for the virtual asset market. This bill clearly defines key concepts such as digital currency, digital financial assets, and mining, officially incorporating the market into the institutional framework. From July 1, 2026, individuals and businesses will be able to legally buy and sell virtual assets through registered exchanges or brokers, and from July 1, 2027, the use of authorized brokers will become mandatory.

Tradable assets will be limited to large cryptocurrencies with an average market capitalization of over $55 billion to $60 billion. While their use as a payment method within Russia is prohibited, they are allowed for corporate foreign trade settlements. Additionally, a digital custody system similar in structure to securities accounts will be introduced, requiring investors to purchase assets through licensed platforms and store them in official accounts.

Regulations for individual investors will also be strengthened. Investors must pass a separate exam, agree to risk disclosures, and annual investment limits may be set. Asset withdrawals will only be possible to approved overseas platforms, and transfers to personal wallets will be restricted. Authorities will also have the power to control capital outflow if necessary. Mining will only be permitted for registered businesses and individuals who meet certain conditions, while individuals with serious criminal records will be prohibited from participating.

P2P transactions will be progressively restricted. Blocking of suspicious transactions will begin in 2026, and from 2027, P2P transactions using Russian bank cards will be deemed illegal. Exchanges above a certain size will be subject to mandatory registration and central bank oversight. Some cryptocurrencies emphasizing anonymity may be subject to regulation, and all intermediaries must comply with international anti-money laundering standards.

In case of legal violations, high-value illegal transactions may be subject to up to 7 years in prison. Virtual assets are legally recognized as property rights, allowing for criminal punishment in cases of theft or fraud. Taxation will apply to capital gains from sales, while value-added tax will be exempt. Mining and trading profits will be subject to personal income tax. This bill is evaluated as an attempt to reform the regulatory framework in a direction similar to Europe's MiCA.

*Disclaimer: This article is for investment reference only and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*