Federal Law 221-FZ – What It Means for Crypto in Russia

When working with Federal Law 221-FZ, the primary legal framework that governs cryptocurrency activities in the Russian Federation. Also known as Russia's Crypto Law, it defines who can operate, what reporting is required, and how digital assets are taxed. This law sits at the core of Russia’s push to formalize the crypto market while keeping a tight grip on money‑laundering risks.

Another key player is Russia’s AML/KYC regime, the set of anti‑money‑laundering and know‑your‑customer rules that crypto exchanges must follow under 221-FZ. The regime forces platforms to collect real‑name data, monitor suspicious transactions, and report to the Federal Financial Monitoring Service. In practice, this requirement creates a direct link between Federal Law 221-FZ and the operational procedures of every exchange, wallet provider, and token issuer in the country.

Licensing, Taxation, and Compliance

Under 221-FZ, any entity offering crypto‑related services needs a license from the Central Bank of Russia. The licensing process examines capital adequacy, technical security, and internal audit mechanisms. Once licensed, firms must align with the Russian crypto tax code, which treats digital assets as property for capital‑gains purposes. This means traders calculate tax on the difference between purchase and sale prices, and businesses report income from token sales as ordinary revenue.

The law also introduces a reporting framework for large‑scale transactions. Any movement of crypto assets exceeding a set threshold triggers mandatory filing with the financial watchdog. This creates a feedback loop: robust compliance feeds into better market data, which then informs regulators on the effectiveness of 221-FZ.

For developers, the impact is practical. Smart‑contract platforms that operate in Russia must embed KYC checkpoints and ensure that token minting cannot bypass the licensing rules. Projects that ignore these constraints risk being blacklisted, losing access to Russian banks, and facing hefty fines.

Businesses looking to accept crypto payments need to verify that their payment gateway holds a valid 221-FZ license. Without it, they expose themselves to legal uncertainty and potential seizure of assets. The law therefore shapes the entire ecosystem, from retail traders in Moscow to DeFi protocols aiming to serve Russian users.

From a market perspective, 221-FZ has spurred a wave of compliance‑focused exchanges and custodial services. Platforms that quickly obtained licensing have gained a competitive edge, attracting institutional investors who value regulatory certainty. At the same time, the law has pushed some underground P2P networks to adopt stricter identity checks, reducing the anonymity that once defined the Russian crypto scene.

Overall, Federal Law 221-FZ intertwines licensing, tax, and AML/KYC requirements into a single regulatory fabric. By understanding each thread, you can navigate the Russian crypto space more confidently, whether you’re a trader, a startup founder, or a compliance officer.

Below you’ll find a curated collection of articles that dive deeper into specific aspects of the law—ranging from tax strategies and exchange licensing guides to real‑world case studies of how Russian businesses are adapting. Explore the insights to see how the legal landscape shapes opportunities and challenges in today’s market.