Russia Plans Tougher Penalties as Illegal Cryptocurrency Mining Persists Amid Low Registration

Russia is escalating its crackdown on unauthorized cryptocurrency mining operations, with draft legislation proposing severe penalties including fines, forced labor, and imprisonment. The move comes as government data reveals only 30% of miners have complied with new registration requirements, creating significant gaps in tax collection and energy oversight.

The Justice Ministry's proposed amendments target unregistered mining activities, with penalties scaling based on operational scale. Individual violators face fines up to 1.5 million rubles ($19,000), while organized mining groups could be fined 2.5 million rubles. The regulations introduce mandatory monthly tax reporting and empower regional authorities to impose mining restrictions to safeguard energy infrastructure.

This regulatory push reflects Moscow's attempt to bring the rapidly growing crypto mining sector under state control. With Russia emerging as a major mining hub following China's 2021 ban, the government seeks to capture tax revenue from an industry that currently operates largely in the shadows while addressing concerns about uncontrolled energy consumption.