Russia Proposes Criminal Penalties for Unregistered Crypto Mining
Russia’s Ministry of Justice has introduced draft amendments to the Criminal Code proposing criminal penalties for unregistered cryptocurrency mining, aiming to curb illegal activity in the sector. The draft was published on Monday.
Under the proposal, illegal crypto mining could be punishable by fines of up to 1.5 million rubles (about $19,000) and up to two years of forced labor. If mining operations generate outsized profits, penalties could increase to a maximum of five years in prison, 480 hours of forced labor, and fines of up to 2.5 million rubles. Unregistered mining conducted by an “organized group” that realizes outsized profits could also result in fines of up to 2.5 million rubles or up to five years of forced labor or imprisonment.
Only 30% of miners are registered
The proposal follows the government’s effort to bring cryptocurrency mining into the formal tax system. Miners are required to submit a monthly tax declaration detailing the volume of digital currency produced. As of June 19, only about 30% of miners had registered and legalized their operations, Deputy Finance Minister Ivan Chebeskov told Tass, noting that the goal is to bring the industry out of the shadows and that the process remains incomplete.
According to a decree dated Nov. 1, 2024, miners with monthly electricity consumption below 6,000 kWh are treated as individuals and may operate without registration with the Federal Tax Register, but they must pay personal income tax on mined cryptocurrency.
Finance Minister Anton Siluanov said there were 1,364 registered cryptocurrency miners in Russia at the end of October, speaking during a plenary session of the State Duma.
In August 2024, President Vladimir Putin signed legislation establishing a regulatory framework for cryptocurrency mining, which took effect on Nov. 1, 2024. The law mandates registration and tax reporting for all mining participants, including infrastructure providers, bans foreign entities from mining in Russia, and authorizes the government to restrict mining in certain regions. The measures drew criticism from some stakeholders who argued the framework does not fully legalize crypto mining.
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