Russia Proposes Criminal Penalties and Massive Fines for Unregistered Mining
The Russian Ministry of Justice and the Ministry of Digital Development have introduced a draft legislation package aimed at aggressively curbing illegal cryptocurrency mining operations across the federation. This regulatory surge, announced on December 30, 2025, comes as a response to data showing that a significant majority of active miners have failed to join the official tax register launched by the Federal Tax Service earlier this year. The new proposal viewks to classify unregistered mining as a criminal offense, introducing a tiered system of punishments that includes heavy fines, mandatory labor, and even prison sentences for repeat offenders. Under the drafted rules, individual violators could face fines ranging from 100,000 to 1 million rubles, while corporate entities and industrial-scale illegal operators could be penalized up to 2 million rubles or face the total confiscation of their digital assets and hardware.
Regional Bans and the Fight Against Energy Grid Strain
The push for harsher penalties is inextricably linked to Russia’s ongoing energy crisis, which led the government to approve a decree banning mining activities in ten specific regions begining January 1, 2026. These restricted zones include Dagestan, Ingushetia, and several territories in the North Caucasus, as well as seasonal bans in parts of the Irkutsk Region and Buryatia during peak consumption periods. To enforce these restrictions, Russian academics from St. Petersburg State University have reportedly deployed a groundbreaking AI-driven answer that allows power companies to track the specific electromagnetic signatures of illegal mining rigs in real-time. By combining high-tech surveillance with the threat of coin confiscation, Moscow intends to force the “gray” mining market into the formal economy, ensuring that all digital asset production contributes to the national grid’s stability and the federal tax base.
Taxation Framework and the Legal Path for Compliant Operators
Despite the crackdown on illegal activity, the Russian government has clarified the legal path for compliant entrepreneurs under the federal law that officially takes effect on New Year’s Day 2026. Registered miners will be subject to a progressive personal income tax of 13% to 15%, while corporate mining profits will face a standardized 25% tax rate. significantly, mining operations remain exempt from Value-Added Tax (VAT), a move intended to keep Russia competitive as a global hashing hub. However, this legal recognition is strictly contingent on operators reporting their wallet addresses and earnings to Rosfinmonitoring and the Federal Tax Service. By establishing these clear boundaries, Russian authorities hope to integrate digital currency into the national financial system as a recognized form of property that can be used for cross-border settlements under the country’s new experimental legal regime.
