Introduction: New Laws for Cryptocurrency Mining in Russia

Russian President Vladimir Putin has signed a set of laws to create a regulatory framework for cryptocurrency mining operations in Russia. While these laws establish important terms and requirements, experts caution that they do not represent full legalization of cryptocurrency mining. Instead, they offer a structured approach with new controls and restrictions for the industry.

Key Provisions in Russia’s Cryptocurrency Mining Laws

The First Law: Industry Terms and Registration Requirements

The first law, signed in August and set to come into effect on November 1, 2024, provides definitions for essential industry terms like mining and mining pools. It introduces registration and reporting requirements for mining companies, while banning foreign entities from engaging in mining activities within Russia. The law also allows the government to restrict mining in certain energy-limited regions.

The Second Law: Regulations for Cryptocurrency Mining Activity

Signed by Putin on October 25, the second law, which also comes into effect on November 1, 2024, outlines additional regulations for mining operations, with core sections activating in March 2025. This legislation aims to establish standards and reporting practices for energy consumption and tax rates in the cryptocurrency mining industry.

Industry Insights: Incomplete Legalization and Operational Challenges

Nikita Zuborev, senior analyst at BestChange, commented that the new laws do not fully legalize crypto mining in Russia. Rather, they provide a structure that simplifies regulatory oversight for industrial mining. However, specific tax and energy restrictions are yet to be detailed by relevant ministries.

“No clear regulations have been provided; instead, these laws pave the way for more precise taxation and standards,” Zuborev said.

Cryptocurrency Mining Moves Out of the “Gray Zone”

According to Anna Maksimenko, a lawyer at KKMP Legal, the new laws have filled a “regulatory vacuum.” Prior to the legislation, mining in Russia operated in a “gray zone” with no clear legal framework. While miners were not explicitly banned, they faced operational challenges due to a lack of regulation.

Maksimenko noted, “Mining in Russia has been widespread since 2017, but the absence of regulation created legal and operational hurdles for miners.”

Restrictions and Prohibitions in Russia’s Crypto Mining Laws

The new crypto mining laws come with specific restrictions, such as banning foreign entities from mining in Russia and prohibiting involvement by energy companies in the mining sector. The government also has the authority to restrict mining in regions facing potential energy shortages, with areas like the Far East, southwestern Siberia, and southern Russia expected to be on the restricted list.

Advertising Ban for Cryptocurrency Services

A previous law signed in August bans public advertising of crypto-related services. Despite this restriction, Russian users are still allowed to buy, store, and sell cryptocurrencies through digital wallets and exchanges. However, no official cryptocurrency exchanges have been registered within Russia to date.

Legal Uncertainty: How to Sell Mined Cryptocurrency

The new mining laws do not clarify the legal methods for selling mined digital assets. This ambiguity may be addressed in future regulatory acts related to implementing the law.

Maksimenko stated, “There remains legal uncertainty regarding crypto transactions; there is no explicit prohibition or allowance for crypto trading in Russia.”