Russia is on the brink of implementing stringent measures to regulate cryptocurrency mining, particularly targeting unlicensed operations. This move stems from a proposed legislative framework currently being evaluated by various government entities, initiated by the Ministry of Digital Development, Communications, and Mass Media.
Mining Rules Tightened
Under the new regulations, penalties for individual miners who fail to comply could be hefty, ranging from 100,000 to 200,000 rubles—approximately $1,270 to $2,540. Larger penalties await those operating solo or in administrative roles, with fines potentially doubling to between 200,000 and 400,000 rubles ($2,540 to $5,090).
Companies found engaging in illegal mining activities face the brunt of these regulations, risking hefty fines from 1 million to 2 million rubles, which translates to around $12,730 to $25,455. This increased scrutiny reflects the government’s commitment to regulating the sector effectively.
Power To Seize Digital Coins
The proposed legislation would empower judges to confiscate cryptocurrencies from those found to be mining without proper authorization. This measure could extend to participants in mining pools as well as larger industrial operations, effectively targeting unregulated activities that place undue strain on local utilities.
BTC hashrate distribution among the biggest known mining farms in the past four days. (Source: Blockchain.com)
Currently, a law allows individuals to mine at home without registration, provided their monthly electricity consumption does not exceed 6,000 kWh. However, this exemption will not apply uniformly across the country, with about ten regions already imposing additional restrictions. Furthermore, individuals with past convictions related to economic crimes or terrorism will be entirely barred from participating in mining activities.
Fines For Crypto Payments
The draft legislation also targets the use of cryptocurrencies for regular transactions. Individuals caught using digital currencies outside the Central Bank’s regulatory framework could incur fines of up to 1 million rubles ($12,730). The Central Bank believes that the threat of confiscation will serve as a significant deterrent against such transactions.
An employee inspects Bitcoin and Litecoin mining rigs at a Russian crypto center in Kirishi. (Getty Images)
Mining data centers and hosting entities will also be required to report their mining activities to Rosfinmonitoring, the anti-money laundering agency, disclosing details such as mining volumes and wallet addresses. Missing these reporting requirements could result in further penalties, although the specifics of any additional fines are yet to be finalized.
A Push Toward Criminal Charges
In a significant shift, the Ministry proposes amendments to the nation’s legal framework, making severe violations in the mining space subject to criminal charges. This increase in legal stakes means offenders would face far more serious consequences than just hefty fines, potentially impacting their criminal records.
The proposed legislation is currently under interdepartmental scrutiny, and if it progresses through this stage, it will be submitted for legislative approval. Miners and industry stakeholders are closely watching developments, as many believe these measures could drive some operations underground or compel others to comply with official regulations.
Featured image from Pexels, chart from TradingView
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