The Russian Ministry of Justice has proposed explicit penalties for individuals and firms that participate in illegal cryptocurrency mining. The draft measures signal a shift toward stricter enforcement rather than broad guidance and raise the stakes for miners who operate off‑grid or evade tax and reporting rules.
Ministry Proposal Targets Illegal Cryptocurrency Mining
The Ministry’s proposal introduces administrative and, in some cases, criminal liability for “illegal cryptocurrency mining,” a term that mainly covers activity that uses subsidized electricity, bypasses reporting requirements, or operates in prohibited zones such as residential networks and socially significant facilities.
Officials want courts to impose fines, confiscate equipment, and seize unlawfully obtained income when miners violate licensing, tax, or energy usage rules.
Unauthorized mining farms that overload local grids and take advantage of low residential tariffs rather than industrial rates have long been a source of frustration for regional authorities.
The increased fines are intended to differentiate between miners who register as legitimate businesses or enterprises and pay market prices for energy and those who conceal their operations behind fictitious usage patterns or illicit connections.
Alignment With Broader Crypto Policy
The Justice Ministry’s move fits into a broader effort by Russian policymakers to formalize digital assets without fully legalizing them as means of payment. Lawmakers already recognize “digital financial assets” and “digital rights” in legislation but still restrict the use of cryptocurrencies in domestic commerce.
Crypto mining sits in a grey zone where authorities tolerate it as an export‑like activity that brings foreign currency into the economy, provided participants comply with tax and financial monitoring rules.
Prosecutors and regulators want clearer legal tools to respond when miners abuse infrastructure or launder proceeds through informal channels. The proposed penalties would give investigators a direct basis to pursue cases involving illegal grid connections, unreported income, or attempts to route mined coins through foreign exchanges without disclosure.
If lawmakers adopt the Justice Ministry’s draft, large‑scale miners that already cooperate with regional utilities and pay industrial tariffs may gain a relative advantage over smaller, underground operators. The rules could accelerate consolidation in the sector, as informal farms either shut down or seek formal status and long‑term contracts with energy providers.
