What’s Happening With Crypto Mining in Russia?

Russia’s new crypto mining laws provide a legal framework but don’t fully “legalize” the activity. Instead, they establish boundaries and controls over mining operations, leaving some uncertainties in areas such as taxation, regional restrictions, and the sale of mined coins.

In August 2024, Russian President Vladimir Putin signed the initial law defining mining terminology. He then imposed requirements for registration and reporting on mining businesses. This law also prohibits foreign entities from mining in Russia and allows the government to limit mining in regions with fragile power supplies. 

On October 25, a second law followed, adding rules on digital currency circulation. These rules will officially take effect in March 2025. However, these laws are viewed as guidelines rather than comprehensive legalization.

Key Aspects of Russia’s New Crypto Mining Laws

While the laws outline responsibilities for businesses and government, they don’t set clear standards for tax or energy usage. Analyst Nikita Zuborev from BestChange noted that the framework mostly aims at making industrial mining easier to monitor rather than fully legalizingHe pointed out that tax rates and energy caps will be defined later by ministries. This is leaving industry players with unresolved questions.

Attorney Maria Agranovskaya observed that before these laws, Russian mining firms operated legally but without a set regulatory framework. The new measures clarify the activity’s legal status, but without defined tax obligations or electricity limits, much remains vague. Miner operations, now officially acknowledged, are still not entirely transparent.

Another lawyer, Anna Maximenko from KKMP Legal, added that prior to the legislation, Russia’s miners were operating in a “gray area.” With the new laws, mining companies now have guidelines for compliance, even though the regulations aren’t fully detailed. The government also prevents entities involved in power production and distribution from mining, aiming to separate energy management and mining activities.

Additionally, Russian authorities have made it illegal for foreign nationals or foreign-controlled entities to mine within the country. This includes a ban on crypto advertisements, though people can still buy, store, and sell cryptocurrencies using local wallets and exchanges. However, no exchanges are currently registered within Russia.

Selling Mined Coins: A Gray Zone

The new regulations don’t clarify how miners can legally sell their coins. While transactions aren’t expressly prohibited, they aren’t formally permitted either. Maximenko believes that this aspect may be addressed in future regulations, though for now, miners have limited options for selling.

Overall, while Russia’s new laws bring structure to the mining industry, many aspects are still unclear. Miners await further details on taxes, energy rates, and legal methods for selling mined assets, leaving the sector cautiously optimistic but uncertain.