Majority of Russian miners are operating outside the law

Efforts to legalize the activities of crypto miners in Russia haven’t been particularly fruitful and only about 30% have so far registered with the country’s tax authority.

The assessment comes from the finance ministry in Moscow, which says it’s working to bring the rest of the growing industry out of the shadows, the main purpose of regulating the sector.

Majority of Russian miners minting outside the law

Less than a third of all Russian entities involved in cryptocurrency mining have been added to the special register of the Federal Tax Service (FNS) which allows them to operate legally, according to the Ministry of Finance (Minfin).

The legalization of the Bitcoin-related business, which has been expanding in the energy-rich Russian Federation, is far from complete, Deputy Finance Minister Ivan Chebeskov told Russia’s state-owned news agency TASS.

“Our general approach, when we introduced regulation, was to bring this industry out of the shadows as much as possible,” Chebeskov reminded. Also quoted by Russian crypto media outlets Bits.media and RBC Crypto, he admitted:

“So far, only 30% of all miners have entered the register maintained by the FNS, and this process is still far from complete.”

The Minfin official emphasized his department will continue work to legalize the remaining two-thirds of the crypto mining sector. These efforts started last year when Russia adopted legislation designed to regulate the crypto activity.

Since the new law entered into force in November 2024, companies and individual entrepreneurs can mine legally as long as they register with the Russian tax authority and pay due taxes.

Private citizens minting digital currencies are not required to do that, as long as they use less than 6,000 kWh of electricity monthly.

The FNS registry was launched in January and by April 1, registration entries had reached 722, including 116 “mining infrastructure operators,” or providers of hosting services and data center operators. Krasnoyarsk Krai, Irkutsk Oblast and the Republic of Tatarstan account of the highest number legal miners in Russia.

Fines and crypto seizure await illegal crypto miners

Many miners prefer to remain in the shadow economy as they fear criminal prosecution over illegally imported equipment, RBC noted in its report. According to the business news portal, an amnesty is already being discussed between legislators and industry members.

Those who decide to continue to mine illegally are going to face heavy fines and other punitive measures, including confiscation of the minted cryptocurrency.

According to amendments to Russia’s Code of Administrative Offenses, currently under consideration, the monetary penalties may reach 2 million rubles ($25,000) for companies and 400,000 rubles ($5,000) for private individuals.

Russia mulls lower electricity rates for legal mining farms

Illegal, also called “gray” crypto miners in Russia have been blamed for increasing electricity deficits in a number of Russian regions. Authorities have reacted by banning all mining in almost a dozen territories and subjects of the Russian Federation. Critics say this hurts legal mining businesses, bringing down tax revenues and electricity sales.

“We need to regulate mining, not ban it,” Russia’s Deputy Energy Minister Evgeny Grabchak was quoted as stating on the sidelines of the St. Petersburg International Economic Forum. Speaking to TASS, he elaborated:

“The Ministry of Energy sees the point not in prohibition, but in more subtle regulation of mining.”

Earlier in June, Grabchak told reporters that his department favors regulatory changes that will help avoid restrictions on cryptocurrency mining in some parts of the country and is working on incentives to attract miners to regions with surplus energy.

Now he revealed these may include offering take-or-pay tariffs for the electricity consumed by legal mining farms. He noted the rates “won’t be much lower, but they will be more long-term.” In May, he hinted on adding miners to a separate category of consumers enjoying lower energy prices that will apply across all Russian regions.

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