The Central Bank of Russia has announced sweeping new regulations that will require all cryptocurrency traders in the country to undergo mandatory Know Your Customer (KYC) identity verification checks. The measures, forming part of a broader cryptocurrency regulatory package scheduled to take effect in July 2026, represent a significant shift in Russia's approach to digital assets.
The core of the new policy mandates that domestic cryptocurrency exchanges implement robust KYC protocols. Russian citizens will be blocked from withdrawing cryptocurrency from wallets operated by domestic firms unless they complete these identity checks. The central bank's stated goal is to "de-anonymise Russian crypto transactions" and ensure transparency, aiming to mitigate risks like fraud and money laundering.
Vladimir Chistyukhin, the bank's first deputy chair, clarified the bank's position in an interview with Russian media outlet RBC. "No one is trying to stop Russian individuals and legal entities from continuing to hold cryptocurrency in foreign wallets," he said. "The only fundamental requirement we have is that they declare [these holdings] to the Federal Tax Service." The bank emphasized it is not interested in seizing crypto, stating, "Nothing will happen to [Russian citizens'] coins... There will be no penalties for possession, and no restrictions on the use of these coins."
A key and controversial aspect of the rules targets the movement of funds. The central bank plans to outlaw the transfer of cryptocurrency from Russian custodial wallets (managed by third parties like exchanges) "to non-custodial wallets abroad." Non-custodial wallets, where users control their own private keys, are seen as particularly difficult to monitor. Under the new framework, traders will be required to move crypto from overseas exchanges first to "official Russian cryptocurrency depositories and exchanges"—which will be obligated to verify identities—before transferring to a non-custodial wallet.
Chistyukhin acknowledged that the crypto industry had pleaded with the bank not to distinguish between custodial and non-custodial wallets for withdrawals. However, he defended the decision, stating the bank "believes it is especially difficult to establish a control mechanism for non-custodial wallets" that complies with anti-money laundering rules.
The move is seen as an effort to stem and monitor capital outflows, with the central bank aware that most Russian traders currently keep coins in overseas wallets. This regulatory push occurs alongside the development of Russia's blockchain-powered digital ruble, a central bank digital currency (CBDC) that could further integrate with a newly regulated crypto market.
