The Russian government is currently seriously pursuing thousands of people and companies mining cryptocurrencies without registration.
A bill has just been introduced in Parliament that would impose fines and prison terms on violators, or the vast majority currently working in the industry.
The push to punish them comes as Russia returns to expanding its mining ban to include two other areas where it is currently completely banned.
Russia to prosecute illegal cryptocurrency miners under new law
The Russian government has submitted a bill to the Duma that would criminalize illegal cryptocurrency mining.
The document amends Russia’s criminal code and adds provisions that also cover the unauthorized provision of services by operators of mining infrastructure.
RBC reports that the new regulations introduce penalties in the form of stiff fines of up to 2 million rubles (approximately $25,000) and up to five years in prison.
Gazeta.ru added that if the economic damage exceeds 13 million rubles, those responsible will be subject to imprisonment and forced labor, as well as fines that can reach 2.5 million rubles.
Even harsher penalties are proposed for illegal mining operations carried out by organized groups that cause significant losses or generate significant income for individuals, other organizations, or the state.
Mining was legalized and regulated in late 2024, allowing both companies and sole traders to freely mint coins as long as they register with the Federal Tax Service (FNS) and pay taxes.
According to the agency, up to 50,000 individuals and legal entities are currently involved in cryptocurrency activities, but fewer than 1,500 have registered so far.
The mining law complements a series of bills recently approved by the executive branch in Moscow aimed at regulating digital currencies and rights in Russia.
The bill legalizes cryptocurrencies, but prohibits trading in them except through licensed intermediaries such as exchanges, brokers, and depositories.
Both accredited and non-accredited investors will be allowed to purchase digital assets, although the latter category will have a purchase amount capped at 300,000 rubles (less than $3,700).
Russian government bans mining in two Siberian regions
Russian authorities are once again expanding a mining ban that already covers many regions from occupied eastern Ukraine to the Far East.
Seasonal restrictions to save energy during the winter months in two Siberian regions expired in mid-March, but were replaced with year-round bans.
According to a decree issued by the federal government on March 18, the minting of digital currencies in some regions of the Republic of Buryatia and Zabaikalsky Krai will be prohibited for five years, from April 1 to March 15, 2031.
Currently, mining is completely prohibited in 13 regions of Russia, including Buryatia and Zabaikal, the neighboring Irkutsk region, the Donetsk, Luhansk, Zaporizhia and Kherson oblasts in Ukraine, Dagestan, Ingushetia, Kabardino-Balkaria, Karachay-Cherkessia, North Ossetia, and Chechnya in the Caucasus.
Meanwhile, Moscow Oblast Energy Minister Sergei Volopanov proposed a ban on cryptocurrency mining in the region and the Russian capital.
The official said local authorities were prepared to take “extreme measures” to reduce the load on the electricity grid, TASS reported.
“According to our estimates, about 1 GW is currently engaged in mining, half of which is located in Moscow and the oblast, without any positive impact on the regional economy,” he told an energy forum.
According to a recent report, Russia is in the top three Bitcoin mining destinations in the world after the United States and ahead of China, and together they account for about 68% of the global hashrate.
This country has conditions suitable for industry, including abundant energy resources and a cool climate throughout its vast territory.
However, the Russian government’s decision to prioritize the use of computing power for artificial intelligence (AI) applications could result in the reuse of many Russian data centers, threatening to undermine crypto mining.
