New Legislation on Cryptocurrency Mining in Russia
The Russian government is moving forward with new legislation aimed at cracking down on illegal cryptocurrency mining activities. Proposed by the Ministry of Digital Development, Communications, and Mass Media, the new rules are currently undergoing an interdepartmental review, as revealed in a Forbes Russia report. Should these proposals be enacted, authorities will be empowered to confiscate digital currencies from individuals engaged in unauthorized mining operations.
Judicial Consequences for Illegal Mining
Judicial consequences are also in the works, as courts would be authorized to levy fines against offenders who violate mining regulations. According to the proposed legislation, the penalties for individuals participating in illegal mining activities could range from 100,000 to 200,000 rubles (approximately $1,272 to $2,544). However, harsher fines are set to be imposed on solo miners and officials, who could face fines between 200,000 and 400,000 rubles ($2,544 to $5,088) if found guilty.
Punishments for Corporations and Industrial Miners
In industrial settings, companies that do not adhere to legal mining practices could incur significantly larger fines, with penalties ranging from 1 million rubles ($12,728) to 2 million rubles ($25,456) for corporations involved in illicit mining. The ministry is aiming to amend the Code of Administrative Offenses to declare illegal mining activities a criminal offense.
Legal Mining and Regional Restrictions
While unregistered individuals can legally mine cryptocurrency from their homes, as long as they keep their electricity usage below 6,000 kWh per month, there exist restrictions in certain regions of Russia. Notably, those with prior convictions related to economic crimes, terrorism, or extremism are barred from engaging in mining activities. Additional constraints prohibit specific utility and grid management companies from participating in crypto mining.
Penalties for Unauthorized Cryptocurrency Transactions
In tandem with the mining regulations, the Ministry is also looking to penalize individuals and businesses that conduct transactions using cryptocurrencies outside the Central Bank’s designated environment. Fines of up to 1 million rubles ($12,728) are proposed for such violations. This development comes at a time when the Central Bank is considering tactics to deter cryptocurrency use, with confiscation threats highlighted as a key strategy. Andrey Medvedev, the Bank’s Legal Department head, noted this during a recent legal forum in St. Petersburg.
Review of Mining Policies Across Regions
In a related note, the government has opted against enforcing stricter mining bans in additional regions, specifically in Khakassia, while postponing proposed year-round bans in other areas. Earlier this year, however, a complete ban on cryptocurrency mining was imposed in portions of the Irkutsk region, recognized as one of Russia’s primary destinations for Bitcoin mining.
