Russia to Limit Crypto Trading to Licensed Brokers & Set Caps

• The Russian government has officially approved a package of draft bills designed to regulate the domestic cryptocurrency market through licensed intermediaries.
• Retail investors will face an annual purchase limit of 300,000 rubles (approximately $3,700) and must pass a mandatory test to trade.
• Transactions occurring outside of regulated channels are strictly prohibited under the new framework, with administrative penalties for violators.

Formalizing the Crypto Ecosystem

The Russian Finance Ministry announced on Monday that the government has moved forward with legislation to legalize and control the circulation of digital currencies and digital rights. The primary objective of this regulatory shift is to eliminate peer-to-peer trading that occurs without state oversight. According to the ministry, any transaction involving digital currency that does not utilize a regulated intermediary will be prohibited. This framework is intended to tighten state control over digital assets while maintaining a tiered access system for different classes of investors.

Restrictions on Retail and Professional Trading

The new rules introduce significant hurdles for individual participants in the crypto market. Non-qualified or retail investors will only be permitted to purchase the "most liquid digital currencies," as defined by the Bank of Russia. To participate, these investors must satisfy several requirements:

• Completion of a mandatory qualification test.
• An annual investment cap of 300,000 rubles ($3,700) through a single intermediary.
• Adherence to reporting requirements for any crypto purchased via foreign accounts to the tax authorities.

Qualified investors will enjoy broader access to the market, and the legislation also establishes a licensing regime for digital exchanges and custodial services. Traditional financial institutions, including banks and brokers, will be permitted to facilitate crypto operations provided they meet specific prudential requirements set by regulators.

Enforcement and Industry Concerns

To ensure compliance, the package includes amendments to the administrative offenses code, introducing liability for organizations that engage in exchange activities without proper licensing. While the government views this as a necessary step toward domestication and oversight, some industry experts warn of unintended consequences. Sergey Mendeleev, the founder of Exved, criticized the move, suggesting that tightening regulations could drive the market underground. He compared the situation to the regulation of casinos, noting that users may not stop trading but will likely migrate to unregulated, offshore, or underground venues to bypass state control.