Report: Russia to Propose 7-Year Prison Sentences for Digital Currency Issuers

The Russian Finance Ministry has reportedly beefed up penalties for the issuance of so-called money surrogates including digital currencies.

AccessTimeIconMar 10, 2016 at 10:25 p.m. UTC
Updated Sep 11, 2021 at 12:10 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

The Russian Finance Ministry has reportedly tightened its proposed penalties for the issuance of so-called money surrogates including digital currencies.

News service Interfax has reported that, according to an unnamed source in the Russian government, individuals who issue money surrogates face as many as four years in prison. Executives with financial firms that release their own money surrogates could be imprisoned for as many as seven years and be restricted from holding similar positions in the future.

Fines for issuing a money surrogate, according to Interfax, range from 500,000 rubles to 1 million rubles, or roughly $7,000 to $14,000, respectively. Executives from financial firms could pay as much as 2.5 million rubles, or about $35,000.

The report comes as Russia moves closer to formally weighing legislation that, if passed, would govern activities involving money surrogates, a classification of non-government issued currencies that includes bitcoin and other digital currencies. Efforts to formalize restrictions on money surrogates began in 2014.

In February, an advisor to Russian President Vladimir Putin issued public statements suggesting that the acceptance of bitcoin would be considered a criminal act.

However, at least one private company is pushing ahead with its plans for a digital currency called BitRuble. Payments firm Qiwi recently said that it is developing the project and working with regulators, including Russia’s central bank, which in the past has indicated its interest in the technology that underlies bitcoin.

QIWI’s plans for BitRuble have drawn fire from some members of the Russian government, and indications suggest that resistance to the project remains.

"This project can be effective for our market, but there are still misunderstandings concerning the technological and regulatory issues," QIWI communications director Konstantin Koltsov told CoinDesk this week.

Image via Shutterstock

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.