Top Highlights
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Criminal Penalties Proposed: Moscow’s Ministry of Justice plans to introduce criminal sanctions, including prison and fines, for illegal cryptocurrency mining, aimed at ensuring compliance with newly established regulations.
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Severe Financial and Imprisonment Risks: Offenders could face fines up to 1.5 million rubles or forced labor for up to two years, with harsher penalties for organized groups or large-scale damage.
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Legal Mining Framework: Legalization of crypto mining in Russia started in November 2024, requiring miners to register and report their activities through the Federal Tax Service.
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Strain on Power Infrastructure: Illegal mining operations have caused significant losses to Russia’s power grid, prompting over 40 criminal investigations due to unauthorized electricity use.
Russia Targets Underground Crypto Miners With Draft Law Introducing Jail Terms
Moscow has proposed a new law targeting illegal cryptocurrency miners. This comes after the country legalized crypto mining last year. The Ministry of Justice aims to enforce strict penalties through draft amendments to existing criminal codes.
The proposed law would penalize unregistered mining with fines up to 1.5 million rubles and forced labor for up to two years. Notably, organized groups or miners generating large incomes could face prison terms of up to five years. These changes aim to regulate the burgeoning digital currency market and discourage illegal activities.
Under the draft, illegal mining includes any extraction by unregistered individuals or entities. Officials defined illegal mining as causing significant harm to citizens or the state. Moreover, miners must report their activities monthly to the Federal Tax Service, which tracks participants in the legal framework.
In addition, the draft introduces a new article in the Criminal Code specifically for crypto activities. This article outlines penalties for violations based on income and damage caused. For example, offenses resulting in damages exceeding 3.5 million rubles could lead to severe consequences.
The government highlights the impact of illegal mining on the nation’s power infrastructure. In 2024, unauthorized operations reportedly cost the state power grid operator over 1.3 billion rubles. Consequently, the law aims to protect the economy and energy resources while promoting responsible participation in the mining sector.
Furthermore, Deputy Prime Minister Alexander Novak indicated plans for more comprehensive regulations, including measures against illegal lending. This move shows the government’s commitment to enhancing the regulatory framework around cryptocurrencies.
Overall, while the draft law may seem strict, it promotes the potential for transparency and legality in the cryptocurrency landscape. As Russia navigates this evolving sector, it could pave the way for innovative technology and sustainable practices in digital currency mining.
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Disclaimer
This content is for informational and entertainment purposes only and does not constitute financial or investment advice. Cryptocurrency is highly speculative and carries significant risk, including the potential loss of your entire investment. Do not make financial decisions based on this information. Consult a licensed financial advisor before investing. This site does not offer, sell, or advise on cryptocurrency, securities or other regulated financial products in compliance with SEC and applicable laws. Please do your own research and seek professional advise.
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