Breaking: Putin Signs Legislation Legalizing Crypto Mining Across Russia
Russian President Vladimir Putin has signed a groundbreaking law that will legalize cryptocurrency mining in Russia starting in November. The official document was published on the portal for the publication of legal acts, according to RIA.
Legal Framework and Regulations
The new law outlines the procedures and conditions for cryptocurrency mining activities. According to the legislation, only Russian legal entities and individual entrepreneurs listed in the Ministry of Digital Development’s registry will be authorized to conduct mining operations. Private citizens not registered as individual entrepreneurs will also be allowed to mine digital currencies, provided they do not exceed government-imposed energy consumption limits.
Entities and individual entrepreneurs will be permitted to operate mining infrastructure after being listed in the official registry maintained by the Ministry of Digital Development.
Advertising Restrictions and Exclusions
While the law initially proposed a ban on the circulation of digital currencies within Russia, this provision was not included in the final version. However, it does impose a ban on advertising cryptocurrencies and offering them to the general public. This restriction will take effect immediately once the law is enacted.
Certain individuals are prohibited from engaging in mining activities. This includes individual entrepreneurs with unresolved or unexpunged criminal records for economic crimes, offenses against state authority, or serious intentional crimes. Additionally, legal entities with such individuals among their founders, beneficiaries, or managers are also barred from mining.
Furthermore, legal entities and individual entrepreneurs are prohibited from combining cryptocurrency mining with activities related to electricity transmission, operational dispatch management in the power industry, or electricity production and sale.
Government Oversight and Penalties
The law grants the government the authority to set additional requirements for miners, including those participating in mining pools, in consultation with the Bank of Russia. The government will also establish requirements for mining infrastructure operators, including the nature and scope of their services. It may also prohibit mining in specific regions or territories and impose full or partial energy consumption restrictions on miners.
Violating these restrictions and engaging in mining without proper registration can result in severe penalties, including the reduction of maximum connected power up to the complete disconnection of energy-receiving devices from the power grid. Such decisions will be enforced by court orders.
Miner Obligations and Reporting
The law mandates miners to report their mined digital currencies and associated identifier addresses to a designated government authority. This authority will then forward the information to Rosfinmonitoring (the Federal Financial Monitoring Service) and the Bank of Russia. The authorized body can also, in coordination with the Central Bank, impose bans or restrictions on digital currency transactions to ensure Russia’s financial stability.
Identifier addresses must also be provided upon request to Rosfinmonitoring, the FSB (Federal Security Service), the Federal Tax Service, and Rosimushchestvo (Federal Agency for State Property Management). Rosfinmonitoring will maintain a list of identifier addresses suspected of being involved in money laundering, terrorism financing, or other criminal activities.
Effective Date
The law, which includes several other provisions, will come into effect ten days after its official publication. However, most of the mining-related regulations will start from November 1, 2024.
