Recent disclosures from Russia’s Deputy Minister of Finance underscore a significant challenge facing the country’s crypto mining landscape: a considerable number of mining operations are still not adhering to legal requirements.
The Underground Mining Economy
In a striking revelation, a report by TASS highlights that a striking 70% of crypto mining companies in Russia continue without proper registration with the Federal Tax Service (FTS). Deputy Minister Ivan Chebeskov disclosed that only a mere 30% of these firms have complied since the legalization efforts began in November 2024.
To put this into context, the Russian administration enacted legislation aimed at legalizing and regulating crypto mining, which came into force on November 1, 2024. This comprehensive law sought to address the issue of illegal mining while simultaneously offering protected status to those registered entities.
According to reports from Bitrabo, within just one month of the legislation’s inception, FTS’s Head Daniil Yegorov noted that approximately 150 companies had applied for registration. However, he anticipated that these numbers might increase significantly as awareness grows.
Fast forward to the present day, the situation still reveals a troubling trend, with only one-third of mining operations engaged in the registration process. The Deputy Minister emphasized the ongoing need for more entities to join the ranks of compliant miners at the recent St. Petersburg International Economic Forum.
Chebeskov reiterated the government’s objective to fully integrate the mining industry into the legal framework of the country: “We are committed to bringing this sector into the light and ensuring compliance with national standards.”
“The registration figures are underwhelming, suggesting a need for reinforced measures. We aim to invigorate this process,” he stated.
Upcoming Regulatory Measures
In a bid to tackle this issue decisively, the Ministry of Digital Development is reportedly drafting a new article to be added to the Code of Administrative Offenses. This amendment aims to impose penalties on unregistered mining operations and ensure accountability in the reporting of mined cryptocurrencies.
Early drafts of this amendment suggest it could introduce several categories of offenses, with a significant focus on non-compliance in cryptocurrency mining activities.
Moreover, the proposed regulations would empower judges to seize crypto assets from individuals operating outside the legal framework, thereby addressing rampant unregistered mining in Russia. Additionally, penalties would impact crypto transactions that occur beyond the Central Bank’s established compliance parameters.
In line with these developments, Russian Finance Minister Anton Siluanov recently shared plans to create a dedicated exchange aimed at “highly qualified investors.” This initiative, in partnership with the Bank of Russia, strives to provide a formalized avenue for crypto operations, moving them towards an official and regulated status.
