No More Free Ride: Russia Declares War on Illegal Crypto Mining with Jail Terms in New Crackdown

Russia Targets Illegal Crypto Mining With Plans For Criminal Charges

Russia is moving closer to criminalising unauthorised cryptocurrency mining, with officials aiming to crack down on those using cheap energy to power unregistered mining operations.

Authorities argue that these activities are increasingly linked to money laundering and pose a risk to the financial system.

Financial Watchdogs Tighten Their Grip

The Federal Financial Monitoring Service, Rosfinmonitoring, is leading the charge, working with the Ministry of Finance and the Central Bank to draft legislation that would bring stricter legal consequences for illicit miners.

Currently, offenders are typically charged with electricity misuse, but Rosfinmonitoring wants to expand this to include administrative and criminal penalties.

German Neglyad, Deputy Director at Rosfinmonitoring, confirmed the agency’s position earlier this month, briefing members of the Federation Council, Russia’s upper parliamentary chamber.

Reinforcing its position that financial loopholes exploited by rogue miners need to be closed, the agency stated,

“It’s time to criminalise illegal mining.”

What Could Change Under The New Rules

As it stands, crypto mining is not banned nationwide.

It is prohibited in only nine regions—mainly during winter months—due to energy strain.

In Irkutsk Oblast, a well-known mining hub, a year-round ban remains in place until 2031.

However, these restrictions are not backed by criminal enforcement.

Police often rely on electricity theft charges, which only result in repayment orders and minor legal costs.

Osman Kabaloev, Deputy Director of the Financial Policy Department at the Ministry of Finance, revealed that legal amendments are being prepared.

These will allow courts to issue stronger penalties based on the severity of the crime.

The proposed laws aim to hold miners accountable if they fail to meet established rules on crypto asset circulation, with both administrative and criminal liability introduced.

More Regional Mining Bans On The Horizon

The Ministry of Energy is reportedly considering extending mining restrictions to additional regions, including parts of Karelia, Khakassia, and Penza Oblast.

A final decision is expected by May.

These potential changes come as demand for mining equipment has tripled since late 2023, according to industry experts.

Rising Bitcoin prices and continued popularity of Ethereum and other altcoins have fuelled renewed interest in mining across Russia.

Could Russia’s Move Influence Global Crypto Policies?

Analysts suggest that Russia’s evolving regulatory approach could influence how other countries shape their own crypto policies.

With increased attention on anti-money laundering measures and energy misuse, the shift may prompt wider global scrutiny of mining operations.

Russia’s energy-driven mining sector is a major player in global dynamics, where cheap electricity has long been a draw for miners seeking cost advantages.

As more countries adapt to the realities of blockchain technology, calls for a clearer and more unified framework continue to grow.

Senator Bernie Moreno, in a separate discussion, noted the importance of supporting US leadership in blockchain development, saying new policies should help the country stay ahead in global competitiveness.