Cryptocurrency mining in Russia faces many challenges
The Russian government has made little progress in legalizing the activities of cryptocurrency miners, with only about 30% of them registered with domestic tax authorities.
This is reflected in a report from the Moscow Finance Ministry, which is urgently amending legislation to legalize the cryptocurrency mining industry and bring it out of the shadows.
Most of Russia's Cryptocurrency Miners Maintain Illegal Operations
Just under a third of Russia’s cryptocurrency mining businesses have been registered in the General Tax Service (FNS) register, which is necessary to operate legally, according to the Ministry of Finance (Minfin).
Legalization of bitcoin mining, an increasingly expanding industry in energy-rich Russia, is far from complete, Deputy Finance Minister Ivan Chebeskov told state news agency TASS.
“We aim to take the industry out of the shadows as much as possible,” Chebeskov stressed. He also admitted:
“Less than 30% of miners have registered with FNS, and the process is far from complete.”
Minfin's position emphasizes that efforts to legalize the rest of the cryptocurrency mining industry will continue in the coming time. These efforts began last year, when Russia enacted laws to regulate the activity.
From November 2024, when the new law comes into effect, mining businesses and individuals can legally operate on the condition of registering with the tax authorities and paying full taxes.
Individual cryptocurrency miners do not need to register if they consume less than 6,000 kWh of electricity per month.
The FNS registry, which opened in January, had 722 registrations as of April 1, including 116 “mining infrastructure providers” such as data storage and data center services. Krasnoyarsk Krai, Irkutsk Oblast, and the Republic of Tatarstan account for the highest percentage of legal miners in Russia.
Penalties and confiscation of illegal cryptocurrencies
Many miners remain reluctant to venture into the dark web due to fears of criminal prosecution for importing illegal equipment, RBC said in its report. In other words, an amnesty policy has been proposed among lawmakers and the industry.
Those who continue to mine illegally will face heavy fines and other sanctions, including possible confiscation of mined cryptocurrencies.
According to the draft amendments to Russia's Code of Administrative Penalties, fines could be up to 2 million rubles ($25,000) for businesses and 400,000 rubles ($5,000) for individuals.
Russia considers cutting electricity prices for legal farms
Illegal miners, known as “gray” miners, have been blamed for causing power shortages in many regions. Authorities have banned mining in nearly 12 Russian regions, severely affecting tax revenues and legal electricity sales.
Deputy Energy Minister Evgeny Grabchak said at the St. Petersburg International Economic Conference that the government needs to regulate, not ban, cryptocurrency mining.
“The Department of Energy believes that regulating mining is much more sophisticated than banning it,” he said.
In June, Grabchak revealed plans to facilitate the attraction of miners to energy-abundant regions through policies such as direct electricity prices that are more suitable for legal farms. He also mentioned the inclusion of miners in the group of consumers who enjoy preferential electricity prices in all regions of Russia.
Source: https://tintucbitcoin.com/chi-30-tho-dao-tien-dien-tu-nga-dang-ky-thue/
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