Russia Cracks Down on Illegal Crypto Mining with New Equipment Register
Russia's Ministry of Energy (Minsvyaz), in collaboration with the Federal Tax Service (FNS) and the Ministry of Digital Development, has compiled a comprehensive register of cryptocurrency mining equipment. This initiative aims to combat illegal mining activities, particularly in regions experiencing high energy consumption and to facilitate the legalization and proper taxation of the crypto mining industry.
Key Takeaways
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A new register of cryptocurrency mining equipment has been created by Minsvyaz, FNS, and the Ministry of Digital Development.
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The register has been distributed to regions with high mining activity to identify and regulate energy consumers.
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This measure is a step towards legalizing the crypto mining industry and reducing illegal energy consumption.
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A working group, including internet providers and power grid companies, is actively identifying and suppressing illegal mining operations, especially in the North Caucasus Federal District.
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Significant energy theft by illegal mining farms has been reported, with one instance in Ingushetia amounting to nearly 90 million rubles in stolen electricity.
Identifying and Combating Illegal Mining
The creation of this register is a crucial step in precisely identifying consumers who use electricity for mining purposes. According to Petr Konyushenko, Deputy Minister of Energy, this identification is essential for applying specific regulations and taxation to these entities. The Ministry of Industry and Trade had previously supported the idea of a unified register for mining equipment.
In addition to the register, a dedicated working group has been established to detect and suppress illegal cryptocurrency mining, particularly in the North Caucasus. This group collaborates with internet providers, power grid companies, and law enforcement agencies. Internet providers analyze traffic patterns to pinpoint areas with high activity indicative of mining, while power grid organizations use thermal imaging to identify additional heat sources. These findings then lead to joint operations with law enforcement.
Regional Bans and Energy Theft
The Russian government has implemented a full ban on cryptocurrency mining in 10 regions from January 1, 2025, to March 15, 2031, due to anticipated electricity shortages. These regions include Dagestan, North Ossetia, Ingushetia, Chechnya, Kabardino-Balkaria, Karachay-Cherkessia, LPR, DPR, Kherson, and Zaporozhye regions. Partial bans are also in effect during autumn-winter periods in parts of Buryatia and Transbaikal, with a year-round ban in southern Irkutsk Oblast.
The severity of illegal mining's impact on energy infrastructure is evident in recent incidents. In Ingushetia, specialists from "Rosseti North Caucasus"-"IngushEnergo," alongside law enforcement, uncovered an illegal mining farm that had stolen electricity worth nearly 90 million rubles. The stolen power, amounting to 9.3 million kilowatt-hours, could have supplied the region's largest city, Nazran, for half a month. This operation involved 334 specialized cryptocurrency mining devices connected illegally to the power grid.
Legal Framework for Mining
Russia adopted a law on cryptocurrency mining last year. Under this law, both Russian legal entities and individual entrepreneurs, as well as Russian citizens, are permitted to engage in mining. However, legal entities and individual entrepreneurs must be included in the FNS register. Citizens not registered as individual entrepreneurs can mine digital currency without being on the register, provided they do not exceed government-set energy consumption limits. All miners are legally obligated to provide the FNS with data on the digital currency they acquire.
Sources
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В Минэнерго рассказали о борьбе с незаконным майнингом криптовалют в СКФО, РИА Новости.
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Незаконно потребившую электроэнергию майнинг-ферму нашли в Ингушетии, РИА Новости.
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Минэнерго составил реестр оборудования для майнинга криптовалют, РИА Новости.
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