Crackdown Coming: Russia Moves to Outlaw Illicit Crypto Mining

Russia’s financial intelligence agency, Rosfinmonitoring, has proposed new legislation that would criminalize illegal cryptocurrency mining, marking the latest move in the country’s tightening stance on digital assets. The initiative aims to bring unlicensed or unauthorized crypto mining under direct legal scrutiny, transforming it from a regulatory offense into a criminal one.

The proposal, still under consideration by Russian lawmakers, would make it a criminal act to mine cryptocurrencies without proper authorization or outside of approved regulatory frameworks. This move is part of a broader effort to combat money laundering, illicit financial flows, and tax evasion associated with unregulated crypto activities.

Rosfinmonitoring’s director, Yury Chikhanchin, has emphasized the need for stronger controls over crypto mining, especially in regions where the activity has surged due to low electricity costs and minimal oversight. Authorities have raised concerns about the environmental impact, strain on local power grids, and potential use of mining proceeds for illicit activities.

Under the proposed changes, individuals or entities found operating unauthorized mining farms could face significant fines and potential prison sentences. The law would also empower law enforcement to seize mining equipment and assets derived from illegal operations.

While Russia has yet to fully legalize or ban cryptocurrency ownership, it has steadily increased regulation of the sector in recent years. The country legalized crypto mining in principle, but requires miners to register and follow strict guidelines related to taxation and energy use.

Critics argue that criminalizing mining could drive the activity further underground, complicating enforcement and stifling innovation in blockchain technologies. Supporters, however, see the measure as a necessary step toward establishing order in a sector that has operated in legal gray areas for too long.

The proposed bill is expected to be reviewed by the State Duma in the coming months. If passed, it could have significant implications for Russia’s large and largely informal crypto mining community.