Russian crypto traders under pressure from new laws

Russia has been adopting and updating laws allowing it to target cryptocurrency transactions ahead of next year’s launch of its own coin, the digital ruble.

The legislative changes make it harder for ordinary Russians to pay with or trade crypto, as operations like these can lead to account freezing, asset seizure and even criminal prosecution.

Payment system law to hit peer-to-peer crypto trades in Russia

The federal law “On the National Payment System” now empowers banks to restrict access to a client’s bank account if it’s involved in any kind of suspicious transactions, leading Russian crypto news outlet Bits.media raised the alarm this week.

Accounts can be blocked if money linked to illegal activities has been credited to them, the portal pointed out, warning that users of crypto exchange services and participants in peer-to-peer (P2P) transactions can easily find themselves in a situation like this.

The legislation allows financial institutions to take action in a number of scenarios. These include receiving complaints from third parties, signals alleging illegal actions, including fraud-related flows, and any transfers triggering risk detection systems.

Restrictions can be partial or full. In the first case, an affected person is unable to use the payment cards and banking app of a particular institution, and in the latter, the individual loses access to cards issued by all banks and to their platforms.

The law’s provisions can be used to target cryptocurrency traders whose bank accounts can be blacklisted by the Central Bank of Russia (CBR). The most common instances involve the exchange of digital coins for rubles or P2P swaps.

No one is safe from receiving “dirty” cash from fraud and money laundering schemes, online gambling, or other illegal activities, when selling their cryptos for fiat through an online exchanger or a P2P platform, the report noted.

Moscow can use money laundering legislation to curb crypto usage

Russian banks can also freeze accounts under the law “On combating the legalization of proceeds from crime and the financing of terrorism,” also known as the “money laundering law.” It allows banks to flag as “high-risk” and block any sale of cryptocurrency through P2P platforms and digital asset exchanges.

Some of its texts were originally intended to deal with a phenomenon known as “dropping.” In Russian slang, a “dropper” is someone who lends their bank account, wallet or card to fraudsters who use them to launder their criminal proceeds.

However, critics say the same provisions can be employed against ordinary users of crypto exchanges and P2P trading platforms who could end up with their bank accounts blocked by financial authorities and institutions as well.

In May, legal commentators involved in the crypto space warned that recent amendments to the Criminal Code, again aimed at “droppers,” or “money mules,” as they are called in the West, can also be used to threaten crypto traders with account blocking and even prison time.

In June, the Bank of Russia urged commercial banks to exert tighter control on crypto-related transfers. The regulator insisted on the swift identification of such transactions. The updated code authorizes banks to impose monthly limits on wires and prevent cash deposits.

Russia clears ground for upcoming digital ruble launch

The latest Russian offensive against decentralized digital money comes as Moscow prepares for the full implementation of its digital ruble. The CBR recently set the dates for the gradual launch of the central bank digital currency, which should start on September 1, 2026, after Putin’s recent call for “wide adoption.”

Along with the state-issued coin, Russia plans to introduce a universal QR code for payments. Its monetary authority has been vehemently opposed to allowing the use of cryptocurrencies like Bitcoin to pay for goods and services in the country.

Crypto payments are only possible within a special “experimental legal regime” designed to help Russian companies circumvent financial restrictions in foreign trade. Using cryptocurrency as a means of payment was banned with the law “On Digital Financial Assets” which went into force in 2021.

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