The financial office of the Russian government proposes to increase punishment for companies, involved in the cryptocurrency mining or exchange. Institutions can face fines up to $74,000.

Russia’s Ministry of Finance has prepared amendments to the federal law “On the Central Bank”. According to them, cryptocurrency mining and exchange, if carried out by companies, should carry fines from 3 to 5 million rubles ($44,000-$74,000 according to current exchange rate) or 90 days of activities suspension, Russian newspaper Izvestia reports.

“The official monetary unit (currency) of the Russian Federation is the ruble ... It is forbidden to introduce other monetary units and produce (issue) objects of property rights, including those in electronic form, used as means of payment and (or) exchange for cash and not expressly provided by the federal law (hereinafter - surrogate money), as well as to conduct transactions with the use of surrogate money,” an amended article draft of the Law on the Central Bank states.

For the first time in Russian legislation the article provides classification of types of electronic payment, precise definition of the term “surrogate money” and direct prohibition on their use. The current version of the law does not fully explain the concept of surrogate money.

This proposal has already won support of other Russian government bodies, such as the Ministry of Economic Development and the Federal Financial Monitoring Service. According to the spokeswoman of the Ministry of Economic Development Elena Lashkina, cryptocurrencies carry high risk due to the insecurity of assets, while their anonymous nature permits them to be used for or involved in illegal activities such as money laundering and financing of terrorism.

Earlier this year, Russia's Ministry of Finance prepared a draft law criminalising bitcoin mining and exchange. The bill suggests up to 4 years in prison or 500,000 rubles ($7,300) in fines for individuals found guilty of cryptocurrency issuance activity. For organised groups, up to 6 years of imprisonment or fines of 500,000 to 1 million rubles ($7,300-$14,600) are demanded.

The most severe punishment is proposed for senior managers of banks and other financial institutions: up to seven years in jail with deprivation of right to occupy certain positions or a fine ranging from 1 to 2.5 million rubles ($14,600-$37,000). Currently, the draft is undergoing interdepartmental ratification.

Elena Platonova