Russian Policymaker Proposes Seizing Crypto Assets from Unregistered Miners to Curb Illegal Mining and Energy Strain

A senior Russian policymaker has proposed that the government should seize cryptocurrency assets from unregistered or illegal miners, aiming to push the industry into the legal framework. Yevgeny Masharov, a member of the Russian Public Chamber’s legislative review commission, argued that confiscating crypto profits from non-compliant operators would make illegal mining unprofitable and force operators to register with tax authorities. His comments, reported by Russian state media, highlight growing concerns over unregulated mining activities straining regional energy grids and evading taxation.

The proposal aligns with existing regulations requiring miners consuming over 6,000 kWh monthly to register with the Federal Tax Service. However, enforcement remains lax, with many miners in regions like Irkutsk Oblast—historically a Bitcoin mining hub—avoiding compliance to sidestep tax obligations. Masharov emphasized that current laws only allow courts to fine illegal miners for electricity theft or equipment seizures, but not crypto asset confiscation. His plan would amend legislation to classify stolen crypto as intangible property subject to seizure, potentially closing a legal loophole.

If adopted, the policy could integrate into a pending bill that has already passed its first reading in the State Duma. The legislation would empower law enforcement to confiscate crypto in criminal cases, extending to unregistered miners. Masharov stated that this measure would strengthen oversight, ensuring non-compliant operators face financial consequences. He also noted that regions facing energy shortages would benefit from reduced strain on infrastructure caused by unregulated mining operations.

The push for stricter regulation comes amid reports from Russian energy and antitrust agencies of ongoing illegal mining activities. Masharov acknowledged that many operators are highly organized but lack formal registration, complicating enforcement efforts. By targeting illicit profits, the policy aims to incentivize registration, though critics may question its feasibility in a sector known for adaptability. The proposal also reflects broader efforts by Russian officials to formalize crypto oversight, including Masharov’s earlier call for a state-controlled crypto fund using seized assets from criminal proceedings.

Bitcoin remains the dominant focus for Russian industrial miners, with industry leaders recently expressing bullish sentiment about its price trajectory. However, Masharov’s initiative underscores a shift toward prioritizing regulatory compliance over speculative gains. The success of the policy will depend on legislative amendments and the government’s ability to enforce asset seizures without stifling legitimate mining activity. As debates continue, the proposal highlights Russia’s evolving stance on balancing crypto innovation with public interest and energy management challenges.