Russia's new crypto bill advances with fresh exchange and transaction oversight, trader tests

Financial regulators in Russia have prepared a bill designed to regulate the country’s cryptocurrency market in the coming months.

The legislation introduces restrictions for cryptocurrency exchanges, expands and sets new limits on investor access to digital assets, and gives the government access to transactions and holdings data.

Moscow to regulate crypto market the Russian way

The Central Bank of Russia (CBR) and the Ministry of Finance in Moscow (Minfin) have developed a draft law that’s supposed to legalize a number of crypto-related activities in the first half of the year.

The authorities expect lawmakers to adopt it in the spring session of the Russian parliament. It should enter into force no later than July 1, 2025, as originally planned.

A copy of the document was obtained by the business news portal RBC and quoted by the Russian crypto news outlet Bits.media early on Wednesday.

The framework determines who will be granted legal access to cryptocurrencies like Bitcoin and what entities will be authorized to process transactions.

It also ensures that government agencies will have all the information they need to keep a close eye and maintain strict control over everything that’s happening in the crypto space.

Which platforms will host cryptocurrency exchanges?

The organizations that will certainly be permitted to provide exchange services for digital coins are those that already have a license for such operations in the traditional market.

Eight such institutions are currently active in Russia. These are the Moscow Exchange (MOEX), the St. Petersburg Exchange (SPB), the St. Petersburg Currency Exchange, the St. Petersburg Commodity Exchange, the Eastern Exchange, the National Commodity Exchange, the Central Trading System, and the Decentralized Trading System.

Other platforms exclusively focused on crypto trading, such as existing exchange offices or exchangers, will be defined as “digital currency exchange organizations” and added to a special register.

The registration will be mandatory and subject to having a monthly turnover of at least 3.5 million rubles (over $45,000). These market participants will have to meet minimum capital and equity sufficiency standards to be determined by the Bank of Russia.

The reports revealed that the monetary authority intends to also establish requirements for crypto depositories, which will offer custody services.

Crypto exchanges for foreign trade purposes, currently covered by an experimental legal regime allowing Russian firms to bypass fiat restrictions, may be exempted from the new rules. Russian providers will not be held liable for damages caused by Western sanctions.

Who will be permitted to buy and trade cryptocurrencies?

While both qualified and non-qualified investors will be granted access to the market, the former will be required to pass tests, and the latter will face a number of restrictions.

Results from the testing, which should gauge traders’ knowledge of the assets and awareness of the risks, will be valid for a year.

Russian citizens will only be allowed to acquire cryptocurrencies on regulated domestic exchanges, according to the bill.

Total annual purchases will be capped, but the exact threshold is yet to be specified. The previously discussed figure is 300,000 rubles, a little less than $4,000.

Transfers between different wallets of the same person will be exempted. This applies to crypto inheritance and division of property, too.

Separate amendments to Russia’s Law “On the Securities Market” will govern margin trading in the crypto space.

How will the Russian state control crypto transactions?

The draft law obliges service providers to assign a special “identifier address” to all client accounts that will be linked to every crypto transaction.

All fund movements will be reported to the CBR, and the data will be available to relevant agencies such as Rosfinmonitoring, the Federal Tax Service (FNS), law enforcement bodies, and courts.

Licensed intermediaries will collect detailed information about the sender and recipient of every transaction of 100,000 rubles or more ($1,300).

The legislation is based on the new regulatory concept announced by the Bank of Russia in late December, which recognizes cryptocurrencies and stablecoins as “monetary assets.”

Penalties for breaking the upcoming rules, including trading on foreign exchanges not registered in Russia, will likely be introduced in July next year, following a transition period to allow for the legalization of crypto holdings.

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