Russia is planning to increase its oversight on crypto mining in the country, in order to improve the government’s control over compliance with bans on crypto mining in some regions. The Ministry of Energy is considering the creation of a formal, mandatory registry to identify crypto mining equipment and maintain a single register of crypto mining equipment. This initiative could prevent the overconsumption of electricity required to facilitate crypto mining operations, while restricting these activities in areas where they have been banned by the government.
The initiative was proposed by Deputy Minister of Energy Yevgeny Grabchak, Russia’s state-owned publication TASS reported earlier this week. “The fundamental task is to optimise the mechanisms for identifying mining activities. It is important to adapt the law to formulate clearer criteria for classifying activities specifically as the production of digital currency,” the Russian Ministry of Energy said in the report.
Meanwhile, reports citing Russia’s Federal Tax Service (FNS) also claim that Russian taxpayers involved in crypto mining businesses can now declare their crypto earnings through their personal accounts.
Crypto mining is the task of generating new tokens of cryptocurrencies like Bitcoin by solving complex proof-of-work (PoW) algorithms on advanced computers. The process is infamous for massive energy consumption, that disrupts the power supply in regions where mining of crypto assets is carried out.
Russia identified an increase in crypto mining activity in 2022. At the time, Grabchak called for the elimination of legal vacuum to regulate the activity. In 2023, Russia emerged as the second-largest crypto mining region in the world, just behind the US.
The country has imposed a ban on crypto mining activities in some regions including Dagestan, Ingushetia, Kabardino-Balkaria, and Karachay-Cherkessia among others. The ban went live on January 1, and will extend up to March 15, 2031. As per ministry observations, even in these regions ‘grey mining’ has not gone out of operation. In grey mining, crypto miners set up their systems in their homes and garages to continue mining.
According to the TASS report, the chairman of the State Duma Committee on Energy, Nikolai Shulginov believes that this ban may not solve the main problems, and gray mining schemes may still be preserved.
