MOSCOW, Aug 10 (Reuters) - Russian authorities on Tuesday announced a criminal investigation into two allies of jailed Kremlin critic Alexei Navalny for raising funds for his political network, which Moscow has banned as extremist.
The case against Leonid Volkov and Ivan Zhdanov, who are based abroad, is the first time law enforcement has publicly opened an investigation based on a June court ruling that declared Navalny's anti-corruption foundation and regional groups extremist.
The crime is punishable by up to eight years in jail, a sign of the rising stakes for Navalny's political allies.
The extremism ruling, which came into force last week, made it illegal to donate to their groups and dealt a blow to the movement built up by President Vladimir Putin's fiercest domestic opponent ahead of parliamentary elections in September.
While Navalny sits in jail, his allies Volkov and Zhdanov are trying to keep his anti-Kremlin cause alive by outlining their political strategy to supporters on YouTube and social media.
Navalny is serving a 2-1/2-year sentence for parole violations he calls trumped up.
The Investigative Committee, which handles probes into serious crimes, said in a statement that it was investigating other unnamed individuals as well as Zhdanov and Volkov.
For years, Navalny and his allies have crowdfunded donations from supporters via their group's website and other platforms. They have raised funds using bitcoin, which cannot be traced by Russian authorities.
Since the extremism ruling, his allies have encouraged backers to donate via cryptocurrencies to protect them from possible prosecution.
Zhdanov described the case against him as "nonsense" in a post on Instagram and said he had lost count of the number of cases against him.
Volkov and Zhdanov are also accused of other crimes that they say are part of a campaign to crush their activism and dismantle Navalny's movement.
On Sunday, Russian media outlets reported that Lyubov Sobol, a close Navalny ally, had left Russia and flown to Turkey. She has not commented on her whereabouts and her allies have declined to comment.
Separately, a court on Tuesday rejected a lawsuit filed by Navalny against President Vladimir Putin's spokesperson who accused him last October of working with the CIA, an allegation Navalny had said was libellous.
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