Moscow Says 'Show Me Your Keys': Russia Mandates Foreign Wallet Snitching

Russia's government has decided it needs a backstage pass to every Bitcoin address its citizens own. New crypto legislation filed with parliament in Moscow will require residents to snitch on their offshore wallets to the federal tax authority. The state will already know about domestic wallets, of course, because Mother Russia plans to route all coin traffic through licensed domestic intermediaries—because nothing says "decentralization" like a government-controlled on-ramp.

Several government-proposed bills are fundamentally changing how Russian citizens and businesses interact with coins like Bitcoin and how platforms process such transactions. Move over, Satoshi—looks like the state wants to be the third (or rather, the only) signer on every multisig.

Moscow's tax authorities are about to become your new DeFi buddies. Russian Federation residents will be obligated to notify the Federal Tax Service (FNS) about any foreign crypto wallets they have. That's according to provisions in draft legislation designed to comprehensively regulate crypto-related activities, including investment and trading.

The Kremlin this week dropped a legislative bombshell on the Duma, including the flagship "On Digital Currency and Digital Rights" bill. Parliament's lower house is expected to rubber-stamp these acts—legalizing but also heavily regulating decentralized money—before the spring session wraps up by July 1. Because when the government says jump, the Duma asks how high.

Wallet keepers abroad take note: you'll need to tell the FNS about openings and closures within a month. Russian crypto degens who permanently reside in the motherland will also have to file tax reports on all transactions involving foreign wallets. No, you can't just HODL in silence anymore—Madam Tax Inspector wants regular updates.

While Russians won't be forbidden from owning offshore wallets, any digital assets purchased in foreign jurisdictions must be paid for using foreign fiat accounts. The Kremlin's logic? Make capital flight through crypto about as easy as fleeing to Mars. Authorities also plan to pressure companies to repatriate crypto held in foreign addresses. Yes, the same Russia where your exchange balance might be worth more as ruble dust.

Industry insiders estimate Russia has roughly 10 million crypto users, moving about 50 billion rubles ($600+ million) daily. That's a lot of unreported sats—and apparently, the government's favorite kind.

The long-awaited crypto legalization is finally here, and it's the most Russian thing imaginable: lots of red tape, government snooping, and suspiciously specific rules about how citizens can stack Bitcoin. Think of it as financial freedom, Moscow-style.

Regular Russian retail investors will technically be allowed to buy crypto, but caps will apply: up to 300,000 rubles yearly (under $3,700) and limited to a few liquid coins. The Central Bank also wants commercial banks restricted to 1% of capital exposure to crypto—whether they're buying for themselves or their clients. Because when your banks can't do something stupid with money, they're probably doing something un-Russian.

Crypto exchanges currently operating in the gray zone will get one year to apply for a license—deadline is July 1, 2027. Traditional financial institutions like banks, brokers, and stock market operators can offer crypto services under their existing licenses. Banks barely touching crypto is apparently the new normal here.

The regulatory framework introduces "digital depositories"—basically stock market custodians who also manage crypto wallets. Each client will technically have their own personal wallet, but every transfer requires approval from the custodial provider. Your keys, their signature. Peak sovereignty.

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