The Russian government is now seriously going after thousands of people and companies mining cryptocurrency without registration.

A bill bringing fines and prison sentences for the violators, or the majority of those currently involved in the industry, has just been filed in parliament.

The push to punish them comes as Russia returns to expanding a mining ban to cover another two regions where the activity is now fully prohibited.

Russia to prosecute illegal crypto miners under new law

The Russian government has submitted a draft law criminalizing illegal cryptocurrency mining to the State Duma, the lower house of parliament.

The document amends Russia’s Criminal Code, adding an article that also targets the unauthorized provision of services by operators of mining infrastructure.

The penalties introduced with the new provisions come in the form of stiff fines of up to 2 million rubles (nearly $25,000) and prison sentences of up to five years, RBC reported.

If the financial damages caused exceed 13 million rubles, the responsible person would face a fine that can reach 2.5 million rubles, besides imprisonment and forced labor, Gazeta.ru added.

Even harsher penalties have been proposed for illegal mining operations carried out by an organized group, causing significant losses to individuals, other organizations, or the state, or generating large-scale income.

Mining was legalized and regulated in late 2024, and both companies and sole proprietors are free to mint coins as long as they register with the Federal Tax Service (FNS) and pay their taxes.

According to the agency, up to 50,000 individuals and legal entities are currently engaged in the crypto activity, but less than 1,500 have so far registered with it.

The mining legislation complements a package of bills designed to regulate digital currencies and rights in Russia, recently approved by the executive power in Moscow.

The draft laws legalize cryptocurrencies but prohibit any crypto transactions outside licensed intermediaries such as exchanges, brokers and depositories.

Both qualified and non-qualified investors will be allowed to buy the digital assets, but purchases will be capped at 300,000 rubles (less than $3,700) for the latter category.

Russian government bans mining in two Siberian regions

Russian authorities are again expanding a mining ban that’s already covering a number of territories from occupied Eastern Ukraine to the Far East.

Seasonal restrictions to save energy during the winter in two regions in Siberia, which expired in mid-March, have been replaced with a year-round ban.

Starting April 1, the minting of digital currencies in parts of the Republic of Buryatia and Zabaykalsky Krai has been prohibited for the next five years, until March 15, 2031, according to a decree issued by the federal government on March 18.

Mining is now fully banned in 13 Russian regions, including Buryatia and Transbaikal, the adjacent Irkutsk region, the Ukrainian oblasts of Donetsk, Luhansk, Zaporizhzhia, and Kherson, as well as Dagestan, Ingushetia, Kabardino-Balkaria, Karachay-Cherkessia, North Ossetia, and Chechnya in the Caucasus.

Meanwhile, the Energy Minister of Moscow Oblast Sergei Voropanov proposed banning cryptocurrency mining in the region and the Russian capital city.

Quoted by the TASS news agency, the official indicated that local authorities are ready to take “extreme measures” to reduce the load on the power distribution network.

“According to our estimates, about 1 GW is currently engaged in mining, half of which is in Moscow and the Oblast, which has no positive effect on the regional economy,” he said during an energy forum.

According to a recent report, Russia is in the world’s top three Bitcoin mining destinations, behind the United States and ahead of China, which together account for approximately 68% of the global hashrate.

The country offers the appropriate conditions for the industry, including abundant energy resources and cool climates in various corners of its vast territory.

However, Moscow’s decision to prioritize the use of computing power for artificial intelligence (AI) applications may repurpose many Russian data centers, threatening to undermine crypto mining.

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