Russia to introduce criminal liability for illegal mining

In 2026, new measures regarding criminal liability for illegal digital currency mining will come into force in Russia. Deputy Prime Minister Alexander Novak announced this at the Council for Strategic Development and National Projects. This initiative is aimed at regulating the circulation of digital assets and combating the illegal use of resources.

Reasons for Introducing Criminal Liability

Alexander Novak emphasized that the increase in cases of illegal electricity use, particularly in mining, was one of the main reasons for developing new legislative initiatives. In this regard, the government decided to establish both administrative and criminal liability for violations in the field of digital currency mining.

Key Provisions of the New Legislation

1. Criminal Liability: The introduction of criminal liability for illegal mining implies stricter measures for those who mine cryptocurrency without complying with the law.

2. Administrative Liability: Administrative liability will also be established for violations of mining legislation, which will allow for more effective oversight of this area.

3. Miner Registration: On November 1, 2024, a law legalizing digital asset mining came into force, requiring all legal entities, sole proprietors, and individuals engaged in mining to register with the Federal Tax Service (FTS). This applies to those who exceed the 6,000 kWh per month electricity consumption limit.

4. Reporting: All miners are required to report monthly on their mined digital currency through a special section in their personal accounts on the FTS website.

Impact on the Economy and Balance of Payments

Deputy Chief of Staff of the Presidential Executive Office of the Russian Federation Maxim Oreshkin previously noted that digital asset mining has become a "hidden export" for Russia. This means that cryptocurrency transactions must be accounted for in the country's balance of payments. The introduction of new measures will not only legalize mining but also improve oversight of this activity, which, in turn, could have a positive impact on the economy.

In Conclusion

The introduction of criminal liability for illegal mining in Russia is a step toward regulating and legalizing the digital asset sector. The new measures are aimed at combating the illegal use of resources and creating a more transparent and secure environment for miners. Given the growing interest in cryptocurrencies, such initiatives could contribute to the development of the fintech industry and improve the economic situation in the country.