New draft law targets illegal mining as most operators remain outside tax system
Russia is moving to tighten control over its cryptocurrency mining sector by introducing criminal penalties for unregistered miners, signaling a tougher stance on an industry that authorities say remains largely informal. A new draft bill from the Ministry of Justice aims to deter illegal mining activity and push operators into the official tax framework.
Details of Proposed Criminal Penalties
Under the proposed amendments to the Criminal Code, individuals engaged in illegal crypto mining could face fines of up to 1.5 million rubles (around $19,000), along with up to two years of forced labor. In cases involving large-scale or outsized profits, penalties become significantly harsher, including up to five years in prison, 480 hours of forced labor, and fines reaching 2.5 million rubles.
If illegal mining is conducted by an organized group and generates substantial profits, the same upper-tier penalties would apply, reflecting the government’s intent to treat coordinated mining operations as serious economic offenses.
Low Registration Rates Raise Concern
Officials say enforcement is needed because compliance remains weak. As of mid-2025, only about 30% of crypto miners have registered with tax authorities. Miners are required to submit monthly reports detailing the amount of digital currency produced, allowing the state to assess and collect taxes.
Small-scale miners consuming less than 6,000 kWh per month are exempt from registration but must still pay personal income tax on mined assets.
Russia formally introduced a mining regulatory framework in late 2024, mandating registration, taxation, and reporting for mining entities. The law also bans foreign miners and allows restrictions in certain regions, underscoring the state’s effort to bring crypto mining out of the shadows and under fiscal oversight.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.