The Bank of Russia has proposed mandatory KYC checks for all cryptocurrency transactions on domestic platforms, with a July deadline for legislation that would also require citizens to declare offshore holdings to the Federal Tax Service.
The Bank of Russia plans to require identity verification for every person who buys, sells, or transfers cryptocurrency through a domestic exchange — a sweeping proposal that would end anonymous trading within the country's borders by July.
Vladimir Chistyukhin, the central bank's first deputy governor, disclosed the plan in an interview with Russian business outlet RBC. The rules would compel exchanges operating in Russia to apply know-your-customer protocols before allowing any transaction; accounts that fail to verify would be blocked from withdrawing assets. Transfers from Russian custodial wallets directly to foreign non-custodial wallets — the kind of unhosted addresses that sit beyond the reach of any regulator — would be banned outright.
The proposal is not a ban on crypto ownership. Chistyukhin was explicit on that point: "Nothing will happen to their coins," he said, referring to holdings already in the hands of Russian citizens. There are no penalties planned for possession, and no restrictions on the use of assets held in personal wallets. What the central bank wants is visibility — specifically, the ability to trace who is moving what, and where.
That distinction matters, because Russia's relationship with cryptocurrency has been contradictory for years. The country legalised crypto as property in 2020 but banned its use as a means of payment. It permitted mining — Russia is now one of the world's largest producers of bitcoin — while simultaneously trying to prevent capital from flowing out of the country through digital channels. The new KYC rules are an attempt to square that circle: allow ownership, permit trading, but force every transaction into a monitored, taxable corridor.
Offshore holdings are part of the picture too. Under the proposed framework, Russian citizens who hold crypto on foreign exchanges or in overseas wallets would be required to declare those assets to the Federal Tax Service. Chistyukhin framed this as a matter of transparency rather than seizure — "the only fundamental requirement we have is that they declare" — but the practical effect is clear. The tax authority would, for the first time, have a declared inventory of Russian crypto wealth held abroad.
The timing is not accidental. Russia's economy has been under sustained Western sanctions pressure since 2022, and crypto has become a significant channel for capital flight. Russian-linked wallets moved billions into foreign jurisdictions in 2025, much of it through peer-to-peer trades that bypass institutional intermediaries entirely. The central bank's proposal would eliminate domestic P2P trading as an anonymous option; all transactions would need to pass through approved platforms with verified accounts.
How enforceable that is remains an open question. Non-custodial wallets are, by definition, beyond the direct control of any intermediary. A Russian citizen who holds bitcoin in a hardware wallet or a self-custodied software wallet cannot be stopped from sending it wherever they choose — not by the central bank, not by any exchange. The rules target the on-ramps and off-ramps: the points at which crypto meets the traditional financial system. Anyone who stays entirely on-chain, entirely offshore, and entirely outside Russian infrastructure would be technically beyond the scope of these regulations, though they would also be technically in breach of the disclosure requirement.
The July deadline is ambitious. The central bank wants the legal framework drafted and adopted before 1 July 2026, with liability provisions for illicit intermediary operations following by July 2027. Russia's legislative apparatus has moved quickly on crypto before — MiCA took the European Union years to finalise — while Russia's 2020 digital assets law was pushed through in months. But the scope here is considerably broader. KYC infrastructure needs to be built, exchange compliance systems need to be upgraded, and the tax service needs the technical capacity to receive and process crypto declarations.
The broader pattern is unmistakable. Dubai launched a blockchain-based KYC platform last year; Singapore tightened its licensing regime; the UK's FCA has pushed through a new authorisation framework for crypto firms. What makes Russia's approach distinctive is the combination of scale, speed, and political context. This is not a market-friendly regulatory sandbox. It is a state that wants to know exactly who holds what, where they hold it, and how much tax they owe on it.
Chistyukhin's assurances about the safety of existing holdings may be genuine. But in a country where property rights have historically been subject to political reinterpretation, a mandatory register of crypto wealth — domestic and foreign — is not a neutral instrument. The central bank says it wants transparency. History suggests that transparency, once established, tends to find additional uses.
