The Russian government has approved a sweeping ban on cryptocurrency mining in ten regions, effective January 1, 2025, through March 15, 2031.
The decision, reported by the State-owned news outlet TASS on December 24, addresses local electricity shortages and aims to align mining activities with evolving regulations.
The ban targets southern regions, including Dagestan, Ingushetia, Kabardino-Balkaria, and North Ossetia, as well as territories such as Donetsk and Lugansk. It prohibits both large-scale mining pools and individual operations. Siberian regions like Irkutsk and Buryatia will face seasonal restrictions during winter energy peaks, extending from November 15 to March 15 annually after 2025.
Crypto mining was legalized in Russia in November 2024, albeit under strict conditions. Miners must report assets and wallet addresses to the Federal Tax Service (FTS). Individual entrepreneurs and legal entities are required to register, while individuals are only allowed up to 6,000 kWh of energy usage per month without registration.
READ MORE: Russia Legalizes Crypto Mining: Is This a New Front in the Sanctions Battle?
Energy concerns have prompted caution from Kremlin officials. Maxim Oreshkin, deputy head of the presidential administration, recently warned of a potential energy shortage within the next 5 to 10 years due to the rapid growth of crypto mining. Oreshkin highlighted significant pressure on the country’s energy supply, particularly in southern Siberia, where Bitcoin mining thrives due to low electricity costs.
However, TASS reported that Sergey Kolobanov, deputy director of the Center for the Economy of Fuel and Energy Sectors at the Center for Strategic Research, said that this new ban is not only trying to prevent energy shortages but because of the subsidized electricity pricing in certain regions. Kolobanov reportedly claimed that the timeline of the ban coincides with the transition period for eliminating the country’s current power subsidy program. He noted that the restrictions may be lifted if capacity allows.
Interestingly, following the legalization of crypto mining, the Russian Ministry of Finance proposed a 15% tax on mining income, with miners permitted to deduct expenses. This proposed bill is under deliberation in the Russian legislative chambers.
If you want to read more news articles like this, visit DeFi Planet and follow us on Twitter, LinkedIn, Facebook, Instagram, and CoinMarketCap Community.
“Take control of your crypto portfolio with MARKETS PRO, DeFi Planet’s suite of analytics tools.”
