Russia Tightens Crypto Mining Rules: New Law Set to Take Effect on Nov. 1

Key Takeaways

• Russia’s mining industry is potentially getting a tighter set of regulations.
• If the law is passed, the Russian government will be able to enforce bans on crypto mining.
• The law could be coming into power on Nov. 1.

Russia has made another move to tighten control over its rapidly growing crypto mining industry .

The country’s lower house of parliament has passed new laws to clarify the roles of government agencies in regulating mining, including giving the government the power to ban crypto mining completely.

Russian Crackdown on Crypto Mining

Russia’s State Duma has passed key amendments to the country’s crypto mining law, which was legalized this summer .

The new amendments aim to establish clearer guidelines and requirements for crypto miners operating in Russia.

Among the most notable changes is the mandatory registration of large-scale miners and mining pools with the Federal Tax Service (FTS).

Private miners, on the other hand, will be exempt from registration requirements, but they will be subject to strict energy consumption limits.

Moreover, the new law grants the Cabinet of Ministers the authority to impose a blanket ban on crypto mining across Russia or in specific regions, should they deem it necessary.

The Ministry of Finance is keen on legalizing mining, saying it will attract investment and create jobs.

However, it’s also clear that the government wants to keep a close eye on the industry and make sure it’s not getting too big for its boots.

The amendments will now head to the Federation Council for a final vote. If approved, the new rules will take effect on Nov. 1, potentially marking a significant shift in Russia’s crypto mining industry.

Tax on Mining

In addition to regulating the mining industry, the Russian government is reportedly still exploring various tax options for different categories of crypto mining.

One of the new options being considered is income tax on mining in data centers, according to State Duma Deputy Anton Gorelkin.

The government previously proposed a two-stage tax proposal for mining in data centers.

Under the proposed framework, in the first stage, miners would face an initial tax payment on their mined coins as soon as they enter their digital wallets.

In the second stage, the FTS would impose another tax payment or deduction of losses when miners sell or transfer the mined crypto, depending on its sale value.

Other mining categories will likely be subject to a single tax on imputed income (UTII), which would be based on electricity consumption.