Originally published on: November 01, 2024
Russian President Vladimir Putin recently signed a series of laws aimed at establishing a regulatory framework for cryptocurrency mining operations within the country. While experts caution that Russia has not fully legalized crypto mining, these laws serve as a foundation for implementing new controls and restrictions in the sector.
The first law, signed in August, introduced key industry terms and imposed registration and reporting requirements for mining businesses. It also prohibits foreign entities from engaging in mining activities in Russia and grants the government the authority to regulate mining activities in specific regions.
The second law, signed on Oct. 25, outlines regulations for mining activities and digital currency circulation. While the law officially goes into effect on Nov. 1, 2024, its core provisions will be implemented in March 2025.
Despite these legislative developments, Nikita Zuborev, chief analyst at BestChange, underscores that the laws do not equate to full legalization. Instead, they establish norms that simplify oversight of industrial mining operations.
The laws define the rights and obligations of companies and regulatory authorities, including standards for electricity consumption and tax rates, though the specific figures will be determined by relevant ministries. Maria Agranovskaya, a legal expert in fintech, acknowledges the usefulness of the legal clarity provided by these laws but emphasizes that they do not amount to a complete legalization of mining.
Anna Maximenko, a partner at KKMP Legal, highlights that the new laws fill a regulatory vacuum that previously left miners operating in a legal gray area. Russia’s thriving mining sector has been largely unregulated since 2017. Nevertheless, the laws introduce restrictions, such as barring foreign individuals or entities engaged in the power industry from mining in Russia.
Maximenko also notes that the government can prohibit mining activities in regions at risk of power shortages and that public advertisements for crypto services are prohibited by an earlier law. Notably, the legislation fails to address legal methods for selling digital assets acquired through mining.
These developments in Russia’s crypto mining sector come after the country’s introduction of its first cryptocurrency law in 2021, which recognized cryptocurrencies like Bitcoin but prohibited their use as a payment method. As the Russian government continues to refine its approach to regulating the crypto industry, observers anticipate further clarity and guidance on digital asset transactions and mining practices in the future.
