Russian President Putin Signs New Law Expanding State Control Over Cryptocurrency Sector, Targets Mining and Financial Tracking

Reportedly, the new Russian crypto laws aim to tighten government control over the primary functions of the cryptocurrency sector within the Russian Federation.

Russia has historically had a complex stance on crypto, seeing periods of both adoption and proposed bans, often driven by the Bank of Russia.

On 27 Oct 2024, the Russian government formalised a new crypto law signed by President Vladimir Putin. This law is set to expand state control, especially over cryptocurrency mining, while granting specific agencies the authority to track transactions linked to money laundering or terrorist activities.

Coming into effect in November, the law grants authorities the power to enforce mining restrictions in particular regions and set rules for halting certain mining activities. Experts noted that the law provides the government with the ability to stop cryptocurrency mining operations in designated areas, along with the right to regulate infrastructure providers aiding mining activities.

Impact of the Russia-Ukraine War on the Crypto Sector

The Russia-Ukraine conflict, which began in Feb 2022, had a significant impact on the crypto market, initially driving down prices but later sparking a surge as demand increased rapidly. Amidst banking shutdowns due to cyberattack risks, many Ukrainians used cryptocurrencies as an alternative payment method to aid in evacuation efforts. Additionally, global supporters sent crypto donations to aid Ukrainian government agencies with medical and other resources for the military.

Due to financial sanctions on Russia, Russian government agencies have increasingly explored Bitcoin and Ethereum as alternatives to circumvent restrictions.

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