Russia’s cryptocurrency laws have not convinced most mining businesses to register with authorities, as only 30% of the miners have entered the Federal Tax Service Register since late 2024.
The Russian government began enforcing two crypto mining-related bills in October and November 2024, introducing legal definitions and registration requirements for mining businesses.
Still, 70% of the miners remain underground, Finance Ministry official Ivan Chebeskov said, according to a report by local news agency TASS on Thursday.
“When introducing mining regulations, our general approach was to bring this industry out of the shadows as much as possible. We have not yet completed this process,” Chebeskov reportedly said.
Regulators pledge to push further registrations
Chebeskov said registering Russian mining companies is “still far from over,” adding that authorities will work to bring the remaining 70% into the legal fold.
“We will work to complete this process,” he said.
While Chebeskov did not mention any specific planned measures for encouraging miners to register their operations, earlier reports suggested Russia might consider more stringent penalties for illegal miners.
On June 9, Forbes Russia reported that Russia’s digital development ministry was working on a new bill to increase the fines for illegal crypto mining operations to 2 million Russian rubles ($25,500) from the current 200,000 rubles.
Enforcement takes action against illegal miners
The latest comments from Chebeskov came on the same day as Russian enforcement reported on shutting down another illegal mining farm in Russia’s Rostov region.
Police discovered a mining farm in a garage complex in the city of Bataysk, seizing equipment including 13 crypto mining devices, an official representative of the Russian Ministry of Internal Affairs reported on Thursday.
Local investigators have opened a criminal case on the grounds of a crime under Article 165 of Russia’s Criminal Code, the official said.
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Last week, local authorities shut down another illegal crypto mining operation hidden inside a truck siphoning electricity from a village in Russia’s Pribaikalsky region.
Criticism of Russian mining laws
Many local market observers criticized the crypto mining laws adopted in Russia in late 2024, with some arguing that they failed to fully legalize crypto mining in the country.
“No new clear regulations are introduced, it only paves the ground for more precise taxation,” BestChange chief analyst Nikita Zuborev told Cointelegraph last year.
Some attorneys also noted that the new crypto mining laws in Russia introduced a number of restrictions, such as prohibiting foreign persons from mining in the country and imposing mining restrictions in several regions.
Russia’s industry thrives despite restrictions
Although Russia’s crypto mining laws have added new limitations, the local mining industry has been on the rise, according to observations of several industry executives.
Despite the restrictions and difficulties, mining in Russia continues to thrive,” Vyacheslav Kopylov, representative of the local crypto mining firm Prostomining, told Cointelegraph.
“The adoption of new laws in November that allow legal entities to put mining equipment on their balance sheets and pay taxes is an important step for the industry,” he added.
Kopylov also mentioned that major local industry events, such as Russia’s Blockchain Forum, have increasingly featured businesses involved in crypto mining in Russia.
“Today, most of the large stands are occupied by companies offering turn-key services, from data center design to full equipment maintenance,” he said, suggesting that mining has become not just a trend, but a full-fledged industry with a developed infrastructure.
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Additionally, while Russian laws have prohibited foreign companies from setting up local mining operations, miners from many countries, including China, have been increasingly attracted to Russia due to benefits like cheap energy.
“I saw a lot of Chinese who would like to invest in this sector in Russia, not only because of the friendly relationship between Russia and China, but also because of the adequate and cheaper energy in Russia,” Hotcoin’s chief operating officer told Cointelegraph.
“Many Chinese mining machine corporations have stood steadily in the Russian market, and it can be seen that more Chinese companies would like to join the Russian mining industry in the not-too-distant future,” he added.
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