On-shore VASP in Russia

Bank of Russia (Central Bank of the Russian Federation): Establishes AML regulations for financial institutions, supervises compliance, issues and revokes licenses based on AML adherence, and provides guidance on AML best practices. The Bank also proposes crypto-specific rules and maintains registration of digital financial asset operators.

Rosfinmonitoring (Federal Financial Monitoring Service): Russia's lead agency for combating money laundering and terrorist financing. It analyzes financial transactions, ensures institutional compliance with AML/CFT standards and Federal Law No. 115-FZ, and enforces Enhanced Due Diligence requirements.

Federal Tax Service of Russia: Handles tax-related compliance, requiring individuals and organizations to report cryptocurrency holdings and transactions exceeding certain thresholds (notably 600,000 rubles).

Exchanges: Licensed entities with Russian legal status (crypto exchanges, brokers, fiduciary managers) are required. Banks and brokers can obtain crypto exchange licenses via a simplified notification process tied to existing financial permits, subject to prudential requirements set by the Bank of Russia.

Custody Providers: Specialized digital depositories must be licensed or registered in the Bank of Russia's register to maintain records of cryptoasset rights and register wallets. They face restrictions like no lending of client assets and no liability for blockchain malfunctions or issuer blocks.

Payment Processors/Exchangers: Exchangers (for crypto-fiat or crypto-crypto conversions) require inclusion in the Bank of Russia's register. Those with monthly turnover ≥3.5 million rubles can serve users directly; below that, they must use licensed intermediaries. Platforms without Russian licenses are illegal.

Local Presence: Entities must have Russian legal status; foreign platforms without licenses are prohibited for domestic operations.

Bank of Russia register for exchangers/depositories and prudential rules: Licensing/notification for exchanges; competency tests: Implicit in .

Comprehensive bill “On Digital Currency and Digital Rights” for State Duma submission: Covers licensing, caps, infrastructure: Detailed in .

Digital depositories are required to maintain records of rights to cryptoassets, register wallets, and face restrictions like prohibiting lending of client coins to others. (https://forklog.com/en/the-end-of-shadow-trading-russias-forthcoming-crypto-market-rules/)

Exchanges and exchangers with monthly turnover ≥3.5 million rubles can serve users directly, while smaller ones must use licensed intermediaries; all must be licensed or registered with the Bank of Russia. (https://forklog.com/en/the-end-of-shadow-trading-russias-forthcoming-crypto-market-rules/; https://crypto.news/russia-clears-draft-laws-to-tighten-crypto-trading-and-limit-retail-participation/)

Mandatory licensing for intermediaries: Covers digital exchanges, custodial services, trading platforms, and DFA operators; banks, brokers, and securities firms can provide services after authorization.

Simplified process for banks/brokers: Existing financial institutions may use a "notification process" tied to current banking licenses, rather than full standalone applications.

Criminal liability for unlicensed operations: Entities organizing digital currency circulation without Bank of Russia approval face fines ($1,300–$13,000), up to 4–7 years imprisonment, or forced labor; applies to exchanges and large operators.

Registration as DFA operators: Russian banks/exchanges must register with Bank of Russia, which maintains the registry and supervises operations.

Submitting applications/notifications to Bank of Russia for licensing/registration as DFA operators or intermediaries.

Compliance with KYC, competency tests for retail (via intermediaries), and reporting thresholds (e.g., transactions >600,000 RUB/year to tax authorities).

Retail limits: Annual purchases capped at 300,000 RUB (~$3,700–$3,800) via one intermediary; requires knowledge test. Qualified investors (e.g., high income >20M RUB/year, finance master's) face no limits.

Prohibitions: No domestic payments with crypto; reporting mandatory for large transactions. International trade exception since 2024.

Bank of Russia (Central Bank of Russia): Primary regulator; proposes/implements rules, supervises financial institutions, registers digital financial asset (DFA) operators, establishes experimental regimes, and bans domestic crypto payments.

Rosfinmonitoring (Federal Financial Monitoring Service): Handles anti-money laundering (AML) and counter-terrorism financing (CFT); monitors transaction data from crypto providers.

2020 Law on Digital Financial Assets (DFAs): Legalizes crypto transactions but prohibits use as payment for domestic goods/services; mandates reporting of transactions over 600,000 rubles to tax authorities.

2024 Law: Permits digital currency payments in international trade to bypass sanctions, creating an exception to the domestic ban.

Proposed 2026 Framework (to be adopted 2026, retail implementation by July 1, 2026): Legalizes buying/selling digital currencies and stablecoins as monetary assets for retail/qualified investors under tests/caps; allows licensed financial firms (exchanges, brokers) to offer services; permits purchases abroad via foreign accounts with tax reporting; prohibits privacy coins.

Individuals: 13% on total annual income (including crypto profits) up to 2.4 million RUB; 15% on the excess. Non-residents face a flat 30% on Russian-sourced profits.

Businesses: 25% corporate profit tax on crypto-related income (increased from 20% in 2024).

Crypto mining and trading/sales are exempt from VAT.

Individuals: Report all taxable crypto income on annual tax returns (3-NDFL form). Transactions exceeding 600,000 RUB (~$6,500 USD) trigger monitoring, but all profits must be declared regardless. Track purchase/sale dates and RUB values per transaction to calculate net profit.

Businesses/Miners: Mining operators must report to local authorities and the Federal Tax Service database (launched November 2024). Large transactions (≥45 million RUB over two of three years) require reporting or risk fines/prison.

Key Law: Federal law signed November 29, 2024, amending the Tax Code to recognize digital currencies as property, introduce taxes, and exempt VAT on mining/trading (effective 2025).