Russia proposes penalties of up to five years in prison for illegal cryptocurrency mining operations

Source: Yellow Original Title: Russia Proposes Up to Five Years in Prison for Illegal Cryptocurrency Mining Operations

Original Link: Russia’s Ministry of Justice has proposed criminal penalties, including up to five years in prison, for illegal cryptocurrency mining.

The draft legislation introduces Article 171.6 into the Criminal Code, targeting miners operating outside the registration of the Federal Tax Service.

Penalties increase based on income thresholds and the organizational structure of the operations.

Individual offenders generating more than 3.5 million rubles (35,000 USD) face fines of up to 1.5 million rubles or two years of forced labor.

What happened

The Ministry of Justice published the draft amendments on Russia’s official legal portal, aiming to implement them in 2026.

Operations involving organized groups or income exceeding 13.5 million rubles (136,000 USD) will face fines ranging from 500,000 to 2.5 million rubles.

Maximum penalties include up to five years in prison, in addition to fines of up to 400,000 rubles.

Russia legalized cryptocurrency mining on November 1, 2024, requiring registration with the Federal Tax Service.

Over 1,000 entities had registered by May 2025, but compliance levels remain low.

Deputy Prime Minister Alexander Novak confirmed plans to introduce criminal liability in December 2025.

Illegal miners in Ingushetia stole 35.4 million kWh valued at $4.3 million during the first half of 2025.

This accounted for 94% of all unaccounted electricity consumption in the republic.

The total number of mining farms in Russia increased to 196,900 in 2025, a 44% rise from the 136,600 registered at the end of 2024.

Why it matters

Russia controls more than 16% of the global Bitcoin hashrate, making it the second-largest mining center in the world.

Enforcement efforts target both electricity theft and tax revenue collection as the sector gains economic importance.

Kremlin official Maxim Oreshkin has argued that mining should be classified as an export activity.

Central Bank Governor Elvira Nabiullina acknowledged that mining contributes to the strength of the ruble.

Mining companies pay a tax rate of 25%, while individuals face progressive rates of 13‑22%.

Domestic miners consuming less than 6,000 kWh per month remain exempt from registration requirements.

The proposed sanctions represent Moscow’s attempt to formalize the sector while avoiding damage to the grid from illegal operations.