Russia Proposes Severe Penalties for Illegal Crypto Miners

Illegal crypto miners operating in Russia could face severe penalties, including the confiscation of their coins and hefty fines, under new regulations proposed by the nation’s Ministry of Digital Development, Communications, and Mass Media. The proposal is currently undergoing interdepartmental review, and if adopted, it will grant law enforcement agencies and courts the authority to seize cryptocurrency from illegal miners.

Under the new rules, individuals found engaging in illegal mining activities could be fined between 100,000 to 200,000 rubles. For solo entrepreneurs and officials, the fines could be even higher, ranging from 200,000 to 400,000 rubles. Corporations involved in illegal mining could face fines of 1 million to 2 million rubles. The ministry aims to amend the country’s Code of Administrative Offenses, effectively making illegal mining a criminal offense.

The proposal also includes plans to punish individuals and firms for making settlements in crypto outside the Central Bank-run crypto sandbox. The Central Bank believes that the threat of confiscating coins from those who use crypto as a payment tool will serve as a significant deterrent. Andrey Medvedev, the bank’s Legal Department lead, emphasized that the confiscation of illegally used crypto as a means of payment would be the most painful consequence.

The draft law also includes clauses pertaining to mining infrastructure operators who fail to declare their operations to the anti-money laundering agency Rosfinmonitoring. These operators, which typically include data center providers and crypto mining hotel firms, are required to inform Rosfinmonitoring about the crypto mined at their facilities and their crypto wallet identifier addresses.

This development comes just days after the government decided against imposing new mining bans in more of Russia’s regions. A government energy commission, chaired by Deputy Prime Minister Alexander Novak, ruled against a proposal to ban mining in Khakassia. The commission also decided to postpone a proposed year-round ban on mining in the Zabaikalsky Krai and Buryatia regions. This year, Moscow approved a year-round ban on crypto mining in the southern part of the nation’s de facto Bitcoin mining capital Irkutsk.

In summary, the proposed regulations by the Ministry of Digital Development, Communications, and Mass Media in Russia aim to crack down on illegal crypto mining activities by imposing severe penalties, including the confiscation of coins and hefty fines. The proposal is currently under review, and if adopted, it will significantly impact the crypto mining landscape in the country. The Central Bank’s stance on confiscating illegally used crypto as a means of payment adds another layer of deterrence, making it clear that the government is serious about enforcing these new rules.