Russia Intensifies Regulation Of Crypto Mining: Here’s What Changes!

Vladimir Putin makes an unexpected turn regarding crypto by signing legislation that strengthens control over mining. This decision, far from delighting Bitcoin enthusiasts, could upset the financial revenues hoped for in times of economic crisis. The new rules impose increased supervision of the sector, limiting operations to registered entities and introducing regional restrictions. Russia seems to want to balance national security and economic stability by regulating crypto mining.

Russia Tightens Rules on Crypto Mining

The new legislation signifies a considerable strengthening of regulation on Bitcoin mining in Russia. From now on, only registered companies and individual entrepreneurs can officially conduct mining activities. So goodbye to the small players: the government is no longer joking.

This law grants the State the power to terminate the operations of certain mining pools, these groups of miners who collaborate to maximize their profits.

A measure intended, according to Moscow, to combat money laundering and the financing of terrorism, two threats associated with unregulated crypto transactions.

Moreover, miners will have to declare their income and digital currency holdings to Rosfinmonitoring, the Russian financial monitoring agency. This new obligation allows authorities to have an overview of the crypto ecosystem and ensure compliance with local regulations.

To top it all off, the government reserves the right to restrict mining in regions where electricity consumption becomes problematic.

The Russian government issued a law signed by Putin on October 27, aiming to expand state control over the cryptocurrency sector, including strengthening supervision of cryptocurrency mining activities, giving the government the power to stop mining pool operations, and some…

— Wu Blockchain (@WuBlockchain) October 27, 2024

The new rules include:

• Mandatory registration for companies and entrepreneurs;
• Declaration of assets and income to Rosfinmonitoring;
• State’s power to halt operations of certain pools;
• Regional restrictions based on energy consumption.

An astute observer might say: “In Russia, we no longer mine in peace; we mine under the watchful eye of the State.”

When Mining Becomes a State Affair

That’s not all: the amendments to the law also redistribute responsibilities. The national mining register will no longer be managed by the Ministry of Digital Development, but by the Federal Tax Service, which will also handle sanctions for violators.

Individual crypto miners can continue without registering, but must comply with the energy consumption thresholds set by the authorities. The largest companies will have to adhere to strict rules.

Despite this tough stance, the law introduces an interesting aspect: the possibility of trading digital assets, including those issued abroad, on Russian crypto exchanges. A surprising opening, but framed by the Central Bank, which retains control over transactions deemed risky for the financial stability of the country.

Furthermore, Russia, close to an economic disaster, is seeking to integrate cryptocurrencies into its financial system, especially to circumvent international sanctions and reduce its dependence on the US dollar.

Finally, between a Putin who said No to Bitcoin mining in July and who signs the legalization of mining in August, the Russians must be quite confused.