Russian crypto traders under pressure from new laws

Russia is adopting and updating laws that allow it to target cryptocurrency transactions ahead of the launch of its own coin, the Digital Ruble next year.

Legislative changes will make it difficult for ordinary Russians to pay in crypto or trade. This is because such operations could lead to freezes, seizing assets, and even criminal prosecution.

Payment System Act Clashes with Peer-to-Peer Crypto Transactions in Russia

The federal law “on the national payment system” gives the bank the authority to restrict access to clients’ bank accounts if they are involved in any type of suspicious transactions, leading the Russian crypto news outlet bit. The media raised the alarm this week.

Accounts can be blocked if money related to illegal activities are credited to them, the portal noted, and users of Crypto Exchange services and participants in peer-to-peer (P2P) transactions can easily find themselves in such situations.

This law allows financial institutions to take action in many scenarios. These include receiving complaints from third parties, signals claiming illegal activities, including fraud-related flows, and forwarding that triggers risk detection systems.

Limitations may be partial or complete. In the first case, the affected person cannot use the payment cards and banking apps of a particular institution, and the latter will lose access to all banks and cards issued to their platforms.

The provisions of the law can be used by the Central Bank of Russia (CBR) to target cryptocurrency traders who can blacklist their bank accounts. The most common instances include the exchange of digital coins in rubles or P2P swaps.

Receiving “dirty” cash from fraud, money laundering schemes, online gambling, or other illegal activities is not secure when selling crypto for Fiat via online exchangers or P2P platforms, the report says.

Moscow can use money laundering methods to suppress cryptographic use

Russian banks can freeze accounts under the law, also known as the “money laundering law,” about fighting the legalization of revenue from crime and terrorist financing. Banks can flag them as “high risk” and block cryptocurrency sales through P2P platforms and digital asset exchanges.

Some of the text originally intended to deal with a phenomenon known as “drop.” In Russian slang, a “dlopper” is someone who lends to a scammer who uses a bank account, wallet or card to wash off criminal proceeds.

But critics say the same provisions can be adopted for regular users of Crypto exchanges and P2P trading platforms, which can obtain bank accounts blocked by financial authorities and institutions.

In May, legal critics involved in the crypto universe warned that recent criminal law amendments to the West, which aimed at “dloppers” or “money mulls” could also be used to threaten crypto traders by account blocking and even prison time.

In June, the Bank of Russia urged commercial banks to take stricter control over crypto-related transfers. Regulators have argued for a quick identification of such transactions. The updated code allows banks to impose monthly restrictions on wires and prevent cash deposits.

Russia will begin site for future digital ruble launches

The latest Russian attack on decentralized digital money is because Moscow is preparing for the full implementation of the digital ruble. CBR recently set the date for the gradually launch of the central bank digital currency, which is supposed to start on September 1, 2026, after Putin’s recent call for “wide adoption.”

In addition to state-issued coins, Russia plans to introduce a universal QR code for payments. The financial authorities are vehemently opposed to the use of cryptocurrencies such as Bitcoin allowing payments for domestic goods and services.

Cryptocurrency payments are only possible in a special “experimental legal regime” designed to help Russian companies avoid financial restrictions on foreign trade. The use of cryptocurrency as a payment method was prohibited by the Digital Financial Assets Act, which came into effect in 2021.