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Police raided the homes and offices of Russian opposition leaders on Monday, June 11 as the Kremlin starts to use its stick to discredit the nascent political movement.

Police searched the homes of several prominent opposition leaders on Monday, during which investigators claimed to find $1.7m in various currencies found stuffed in more than 100 envelopes at one-time "it-girl"-turned-political activist Ksenia Sobchak's home.

The authorities called most of the leading opposition leaders in for questioning only hours before a scheduled protest on June 12 was due to take place, also the official "day of Russia" public holiday, making it impossible of the opposition de facto leadership to attend the rally. Popular blogger Alexei Navalny, Ilya Yashin and Sobchak spent much of the day answering questions about documents and large sums of money seized in Monday's raids, as well as about clashes between police and protesters at a rally May 6.

Also questioned on Tuesday, June 12 were Sergei Udaltsov's wife, Anastasia, and opposition organisers Maria Baronova, Alexei Sakhnin and Maria Dobrokhotova. Monday's raids also targeted apartments belonging to Maria Baronova, an aide to State Duma Deputy Ilya Ponomaryov; Alexei Sakhnin, the creator of Navalny's Rospil anti-corruption organisation; Navalny's in-laws; and Udaltsov's parents.

The raids comes a week after leading businessmen threw their weight behind Navalny, founding an anti-corruption fund that the Kremlin could take as a slap in the face as the protest movement moves out of the middle classes and into the business elite.

Staying in charge

So far, the protests have been big enough that the Kremlin can't ignore the demands of the people for more political liberty. However, what happens next will be crucial to Russia's political development. The Kremlin has indicated it will respond with a mixture of carrot and stick: the fact the street protests were allowed to happen at all is already a great victory for the nascent movement and Russian PM Dmitry Medvedev followed through with reinstating elections for regional governors that will kick off in October.

However, the Kremlin has also jammed through a new law that significantly ramps up fines for demonstrations it deems to be "unauthorised", imposing fines of up to RUB600,000 ($18,000) and increasing police powers to arrest organisers and participants. There are also unconfirmed reports that students detained by the police at demonstrations could lose their university places or face being called up for national service by the army.

The two sides are eyeing each other warily in what is a very delicate time for the country. While neither side wants a violent Arab-spring type overthrow of the government (and the subsequent inevitable economic chaos that could undo much of the prosperity Russians have enjoyed in the last 12 years) both sides are also nervous.

President Vladimir Putin has made it abundantly clear on several occasions that he wants to go slowly with political reforms, saying that his goal is to "avoid the mistakes made by [Mikhail] Gorbachev." While bne remains convinced that the Kremlin is willing to devolve more power to the people, Putin clearly wants to keep control of the process and will nip any attempt to wrest control out the Kremlin's hands. Hence the arrests and attempts to discredit the opposition with these sorts of raids.

For its part, the opposition still lacks a clear leader or a platform that can unite the opposition. The raids are designed to slow this process down. But ironically all they will do in the long run is stiffen the resolve of the leading protestors and legitimise them in the eyes of the population. It is in the fires of persecution and repression that the steel of the protestors will be tempered.

The reaction to the raids was immediate and tsunami-like in its size: Russian Twitter hashtag "Hello, 1937" – a reference to Stalin's purges of 1937 – quickly became a worldwide trend.