- Russia proposes harsh fines and crypto confiscation for illegal mining operations.
- Mining infrastructure firms must report activities to Rosfinmonitoring or face penalties.
As crypto adoption continues to expand globally, so too does the scrutiny surrounding its misuse.
Russian government to punish illegal miners
In a move to crack down on illicit activities, Russia’s Ministry of Digital Development, Communications, and Mass Media has proposed stringent penalties targeting illegal crypto miners.
The new measures, now undergoing interdepartmental review, would give law enforcement and courts the authority to confiscate cryptocurrencies and levy hefty fines on individuals engaged in unauthorized mining operations.
If approved, the rules will significantly change how the country addresses crypto-related offenses, especially those involving unregistered mining activities and participation in illegal mining pools.
Moreover, Russia’s Ministry of Digital Development aims to extend the crackdown beyond individual miners.
Authorities could soon begin confiscating cryptocurrencies from industrial mining operations that break the country’s mining regulations.
Repercussions faced by offenders
The ministry plans to fine corporations found guilty of illegal mining between 1 million and 2 million rubles ($12,728 to $25,456) as it seeks to amend the nation’s Code of Administrative Offenses.
Under current laws, unregistered individuals can mine crypto at home, provided they keep their energy consumption below 6,000 kWh per month.
Authorities have already imposed tighter restrictions in about ten regions, and they prohibit individuals with certain criminal convictions from engaging in mining activities.
The proposals also aim to penalize crypto-based transactions made outside the Central Bank’s sandbox, with fines of up to 1 million rubles for violators.
The Central Bank believes that threatening to confiscate assets will serve as the strongest deterrent against unauthorized crypto activity.
Remarking on which, Andrey Medvedev, the bank’s Legal Department lead, had noted last month,
“The key thing is that the [crypto] illegally used as a means of payment will be confiscated. And this will be the most painful thing.”
What’s more?
Adding another layer to its regulatory push, the draft law also targets mining infrastructure operators, such as data centers and crypto mining hotel providers, who fail to report their activities to Rosfinmonitoring, Russia’s anti-money laundering watchdog.
These operators will be required to disclose details about mined assets and wallet identifiers tied to their operations.
Interestingly, this development coincides with a recent decision by a government energy commission led by Deputy Prime Minister Alexander Novak to reject further regional mining bans.
While a year-round mining prohibition has already been enacted in parts of Irkutsk, similar proposals for Khakassia, Zabaikalsky Krai, and Buryatia have been shelved for now, signaling a more thought-through approach to regulating the country’s crypto mining sector.
