Russia Targets Unregistered Crypto Miners With New Criminal Penalties

The Russian government has taken a decisive step toward tightening control over the cryptocurrency mining industry. A new draft bill introduced by the Ministry of Justice seeks to impose criminal penalties on miners who fail to register with the tax authorities. This move underscores Russia’s growing determination to formalize digital asset activities and curb tax evasion in the sector.

Key Details of the Draft Bill

• Fines up to 1.5 million rubles (~$19,000) for individuals engaged in illegal mining without registration.
• Forced labor sentences of up to two years for offenders.
• Harsher penalties for large-scale or organized groups, including:
  • Up to five years in prison
  • 480 hours of forced labor
  • Fines reaching 2.5 million rubles (~$31,000).

The legislation specifically targets miners who generate significant profits but remain outside the official tax register. Authorities argue that unregistered mining operations not only deprive the state of revenue but also strain Russia’s energy infrastructure.

Why Russia Is Cracking Down

• Tax Evasion Concerns: Officials claim that most miners have not joined the Federal Tax Service’s registry, leading to substantial unreported income.
• Energy Strain: Large-scale mining consumes vast amounts of electricity, raising concerns about grid stability.
• Market Formalization: By criminalizing unregistered mining, Russia aims to bring transparency and accountability to its digital asset ecosystem.

Implications for the Crypto Industry
This development could reshape the mining landscape in Russia, one of the world’s largest hubs for cryptocurrency mining due to its cheap electricity and cold climate. Registered miners may benefit from clearer legal protections, while unregistered operators face heightened risks of prosecution.

For global crypto markets, Russia’s crackdown signals a broader trend: governments are increasingly unwilling to tolerate shadow mining operations. Similar measures have been seen in countries like Kazakhstan and China, where energy concerns and tax enforcement drive stricter regulation.

Conclusion
Russia’s proposed criminal penalties mark a turning point in its approach to cryptocurrency mining. By targeting unregistered miners, the government is sending a clear message: digital asset activities must align with state oversight and taxation frameworks.

Whether this will lead to greater stability in Russia’s crypto sector—or push miners further underground—remains to be seen. What is certain is that the era of unregulated mining in Russia is rapidly coming to an end.