"The penalties will be different, mostly administrative, but if someone created the cryptocurrency for the purpose of settlements, then there will be a criminal punishment," said Deputy Finance Minister Aleksey Moiseev.
Criminal penalties can also be applied to the creation of a financial pyramid or the issuance of a cryptocurrency to avoid tax, he said. The minister stressed buying Bitcoin, and other cryptocurrencies would still be legal.
Moiseev added that work on the bill could drag on, as it includes many new words and concepts now absent in Russian legislation.
The Ministry of Finance earlier suggested introducing mandatory registration of cryptocurrency miners, allowing only legal entities and individual entrepreneurs to participate.
Russian President Vladimir Putin has ordered the government to create legislation governing the status of bitcoin, other cryptocurrencies, mining, initial coin offerings, as well as defining everything that relates to digital money by July 2018.