Russia Revises Crypto Tax Laws Amid Expanding Regulations

Key Changes in Taxation

Under the new regulations, cryptocurrency was now considered property for tax purposes. Income from mining would fall under the headline, which considers the market value of the crypto mined upon receipt. Miners are also allowed to deduct operational expenses, giving the highly costly industry some financial relief.

Crypto-transactions will no longer be liable for value-added tax. Profits from crypto transactions are to be treated similarly to securities, providing a cap on the personal income tax rate for related income at 15%.

Stricter Oversight for Miners

In a recent move, President Vladimir Putin signed a law transferring oversight of the crypto mining registry to the Federal Tax Service (FNS). Industrial miners must now register with the FNS, while small-scale miners operating from home are exempt, provided their energy usage stays below specified limits.

The FNS has also proposed a two-stage tax system that includes taxes on unrealized gains, targeting cryptocurrency that miners hold without selling. Critics argue this could burden miners, particularly during market slumps.

Energy Limits and Regional Bans

Starting November 1, only registered businesses and organizations will be allowed to mine cryptocurrency. Individual miners will face a cap of 6,000 kilowatt-hours (kWh) of electricity usage per month.

From December 2024 to March 2025, authorities will enforce mining bans in energy-strained regions, including Irkutsk, Chechnya, and the Donetsk People’s Republic (DPR). These measures aim to reduce the strain that crypto mining places on local power grids.

Broader Crypto Strategy

Despite stricter rules, Russia is pushing forward with crypto integration. Sberbank, the country’s largest bank, has launched a pilot for crypto-powered settlements. This aligns with ongoing digital ruble trials and discussions about state-backed stablecoins.

Russia began working on the regulation of cryptocurrency in 2020, presenting the first bill in 2021. Following the numerous delays and debates, the updated framework is attempting to balance the opening toward institutional investors with economic and infrastructural challenges.

Mixed Reactions from the Industry

The new measures could deter small-scale miners who may struggle to remain profitable. However, larger mining operations may benefit from the regulatory clarity.

Russia’s tightened grip on cryptocurrency reflects its attempt to balance growth with governance. Whether these changes encourage innovation or hinder progress will depend on how authorities enforce the regulations in the coming years.