Russia Targets Illegal Crypto Mining with Prison and Heavy Fines

Russia plans harsh penalties for illegal crypto mining, including fines up to 2.5 million rubles, forced labor, and up to five years in prison for unregistered or large-scale operations. New rules require registration and tax reporting.

Russia is set to introduce strict criminal penalties for illegal cryptocurrency mining, following recent legalization of the industry. The Ministry of Justice has drafted amendments to the Criminal Code, proposing fines up to 1.5 million rubles, up to 480 hours of compulsory labor, or two years of forced labor for unregistered mining. For more serious offenses, such as large-scale profits or involvement in organized groups, penalties escalate to fines of up to 2.5 million rubles and prison sentences of up to five years. The new rules, effective from November 1, 2024, require commercial miners to register and file monthly tax reports, while private individuals with lower electricity consumption must pay personal income tax on mined assets. Foreign entities are barred from mining, and public advertising of mining services is prohibited. Despite the new regulations, compliance remains low, with only a small fraction of miners registered. The measures aim to curb unauthorized mining, protect the power grid, and ensure proper taxation.