Russia to grant FSB full access to private keys of custodial crypto wallets by 2027

The Federal Security Service of the Russian Federation (FSB) will receive unrestricted access to private keys of all crypto wallets hosted by licensed custodians, as confirmed by recent decisions from Russian financial authorities.

FSB to gain round-the-clock access to crypto keys

The FSB, which succeeded the former Soviet KGB and acts as the primary internal security agency in Russia, will have immediate, 24/7 access to custodial wallet private keys held by citizens and businesses. This measure will impact all digital assets managed under licensed Russian service providers.

The Central Bank of Russia (CBR), the country’s chief financial regulator, disclosed the changes following meetings with representatives from major banks and financial institutions.

The Association of Banks of Russia had previously suggested that the FSB should not be permitted to access both private keys and digital signing tools. Nonetheless, the central bank rejected this proposal, also turning down a request to postpone these changes until 2028.

Leading banks including Sber, VTB, T-Bank, and Alfa-Bank joined the discussions as key participants within Russia’s regulated digital assets sector.

This government move arises from SORM, a surveillance system made up of technical equipment and protocols that enable authorities to intercept communications nationwide.

Equipped with SORM, the FSB will be able to extract information from crypto exchanges, brokers, and digital custodians, which are defined under new Russian digital currency legislation.

Starting March 1, 2027, all licensed entities in the sector must furnish the FSB with real-time, remote access to all digital records they hold, including messages, images, and transaction data.

At the same time, the Central Bank of Russia confirmed that crypto exchanges and custodians will be required to block transfers lacking clear sender or recipient identification.

Mini dictionary: SORM (System for Operative Investigative Activities)—A surveillance infrastructure mandated for Russian telecom operators, allowing state agencies direct access to digital communications and data stored on networks.

Russian authorities will compel crypto service providers to grant the FSB unrestricted, remote access to all client records, wallet keys, and stored communications beginning in 2027.

Regulation and centralization of Russia’s crypto market

In response to Western sanctions related to its actions in Ukraine, Russia has increasingly turned to digital assets to facilitate cross-border transactions and mitigate financial restrictions.

This year, the administration of President Vladimir Putin advanced legislation to bring the growing crypto market under direct state control. The law on digital currencies and digital rights took effect on September 1, opening the market for both individual and institutional participants, provided they use approved intermediaries.

The Bank of Russia has licensed around 24 crypto exchanges and custody providers, including major Russian banks and national stock exchange operators.

The National Association of Securities Market Participants, an influential industry group with close government ties, has recently been named as the self-regulatory body for all crypto firms in Russia.

Registered exchanges and custodians must join this self-regulatory organization by January 27, 2027, with new licensees required to obtain membership within three months.

Legal use and ownership of cryptocurrencies in Russia will only be possible via wallets maintained by approved custodians. The use of self-hosted wallets is effectively banned, though holders can transfer funds to custodial wallets or use them in international payments.

CBR Deputy Governor Vladimir Chistyukhin confirmed that restrictions on personal crypto wallets will not apply for international transactions.

During policy negotiations, Russian bankers requested more flexibility in crypto management and collateral use but did not secure any concessions from the central bank.