Russia's Draft Crypto Law: A Shift towards Centralized Control

Russia's draft crypto law is set to impose significant restrictions on users' control over their wallets, requiring them to share private keys with the state through digital depositories. These entities will serve as custodians for asset storage, wallet administration, and transactions, with the regulators having the authority to block transactions deemed suspicious.

The bill aims to rebuild the market from scratch, introducing strict controls on P2P trading, arbitrage, and spread-hunting. Traditional banks are expected to play a role in policing fiat flows and assessing clients' crypto deals for suspicion.

Businesses operating in Russia may consider relocating to other jurisdictions with more favorable regulations, as the bill proposes a five-year track record requirement for publicly traded coins, narrowing the menu of available assets.