Russia Proposes Harsh Fines for Illegal Crypto Mining

Russia is intensifying its efforts to regulate cryptocurrency mining, with new rules proposed by the Ministry of Digital Development, Communications, and Mass Media. These regulations aim to crack down on illegal mining operations, imposing significant fines and potential asset seizures on violators. Individual miners could face penalties ranging from 100,000 to 200,000 rubles, while solo operators and officials may see their fines double, reaching up to 400,000 rubles. Companies found running illegal operations could be fined between 1 million and 2 million rubles.

One of the most stringent measures proposed is the authority for judges to confiscate crypto assets from anyone deemed to be mining without proper registration. This power extends to individuals in mining pools and larger industrial farms, targeting unregistered mining activities that strain local power grids. The new rules also address the use of cryptocurrencies for regular transactions outside the Central Bank’s sandbox, with fines up to 1 million rubles for violations. The Central Bank emphasizes that confiscating someone’s coins will serve as the biggest deterrent.

Mining data centers and hosting firms will be required to report their mining activities to the anti-money laundering agency Rosfinmonitoring, including sharing wallet addresses. Failure to comply could result in additional penalties, though the exact fines are not yet specified. The ministry is also pushing for changes to the country’s code to classify serious mining violations as criminal offenses, which would raise the stakes significantly for offenders. This proposal is currently under interdepartmental review and, if approved, will go to lawmakers for final approval.

The new regulations are expected to have a significant impact on the cryptocurrency mining industry in Russia. Many anticipate that these measures will drive some miners out of the market or force them to operate underground. Others may seek to register and comply with the new rules to avoid penalties. The proposal aims to bring order to the cryptocurrency mining sector, ensuring that all operations are conducted within the legal framework and do not strain local resources.