Bitcoin News Today: Russia Proposes Law to Seize Illegally Mined Crypto Aiming to Curb Energy Strain and Tax Evasion

Russian legislators have introduced a proposal to empower authorities to seize illegally mined cryptocurrency, targeting unregistered operations that strain energy grids and evade taxation. Yevgeny Masharov, a member of the Russian Federation’s legislative advisory body, and Anton Gorelkin, deputy chairman of the State Duma Committee on Information Policy, IT, and Communications, spearhead the initiative. The legislation aims to classify crypto assets as intangible property, enabling courts to confiscate digital holdings—rather than just mining equipment—from unregulated miners. Existing laws require miners using over 6,000 kWh monthly to register with the Federal Tax Service, but many operate in the "grey zone," avoiding compliance to sidestep taxes. Under the proposed rules, authorities could seize crypto profits, effectively incentivizing miners to either register or abandon operations.

The draft legislation, which has passed its first reading in the State Duma, seeks to expand enforcement tools by allowing police and courts to target digital assets in criminal cases. This aligns with a broader effort to formalize Russia’s crypto sector, where over 90% of industrial mining focuses on Bitcoin. Current laws permit fines or equipment seizures for electricity theft, but lack mechanisms to confiscate mined crypto. The proposal fills this gap, aiming to "force miners to join the legal sector" by eroding the profitability of unregulated operations. Masharov emphasized the need for urgent action, stating the changes should be approved "as soon as possible" to address energy grid pressures in mining-heavy regions like Irkutsk Oblast.

Analysts suggest the move reflects dual objectives: stabilizing energy infrastructure and integrating crypto into a regulated framework. Illegal mining operations, described as "highly organized," have intensified amid lax enforcement. The legislation could reduce the economic incentive for unregulated mining while ensuring tax compliance. However, its success depends on legislative amendments to legally define crypto as intangible property—a classification absent in Russia’s current code. Enforcement challenges remain, particularly in regions where unregistered miners may relocate to evade scrutiny. Historical precedents, such as China’s 2021 mining crackdowns, show such measures often trigger temporary outflows and shifts in mining geographies, potentially influencing Bitcoin’s market dynamics as miners seek alternative jurisdictions.

The proposal also ties into a broader regulatory vision, including plans for a state crypto fund using assets seized in criminal cases. This initiative, advocated by Masharov, aims to generate revenue for public services while addressing inefficiencies in the current system. By targeting the profits of illicit miners, the legislation underscores a strategic push to balance innovation with oversight. While some industry figures have speculated on Bitcoin’s future price, the focus remains on regulatory enforcement rather than market speculation. The policy’s long-term impact will hinge on miners’ adaptability and the government’s capacity to enforce compliance in a decentralized industry.

Global trends in crypto regulation highlight the tension between fostering innovation and mitigating risks. Russia’s approach mirrors efforts in other jurisdictions to curb illicit activities while safeguarding energy resources. Yet the effectiveness of the proposed measures will depend on the interplay between legal frameworks, enforcement capabilities, and the resilience of unregulated mining ecosystems. As the legislation progresses, stakeholders will watch closely for signals on how Russia intends to navigate the complexities of regulating a sector defined by its borderless and decentralized nature.