Russia Cracks Down on Crypto with Strict Investor Rules

Russia's government has approved draft cryptocurrency bills that will regulate digital currencies and establish a licensing regime for exchanges and custodial services. The bills aim to legalize digital currencies in the country, but also introduce significant restrictions on retail investors.

Under the proposed rules, retail investors would need to pass a competency test before buying any digital assets, with annual purchases through a single intermediary capped at 300,000 rubles (approximately $3,700). The Bank of Russia would determine which cryptocurrencies qualify as liquid enough for retail purchase.

Critics argue that the rules will drive activity underground rather than bring it into the open. Sergey Mendeleev, founder of crypto exchange Exved, compared the expected outcome to gambling restrictions, suggesting that limiting access drives demand into unofficial channels.