Russia is preparing to impose new restrictions on cryptocurrency miners, including stricter penalties for violating existing bans and illegal mining activities.
One of the proposed measures allows authorities to remotely disconnect crypto mining facilities from the grid during periods of highest power demand.
The Russian government is preparing stricter rules for miners
Russia’s Energy Ministry reported that following a recent meeting of Moscow ministers it is being tasked with finalizing regulations for those involved in the extraction of digital currency.
According to a report issued after a meeting chaired by Deputy Prime Minister Alexander Novak, the updated rules include the introduction of greater liability for illegal relationships to distribution networks, power theft and violations of imposed mining bans.
Additionally, crypto miners have been added to a new category of less important consumers, and power source reliability is not guaranteed.
The Ministry of Energy is currently expected to develop a “mechanism to redistribute release capabilities when limiting mining activities in the region to connect socially important consumers to the power grid.”
Russia hopes to extract mining farms remotely
The Russian government explained that the establishment of a new “fourth” consumer category actually means having the option of “introducing remote restrictions on consumption during peak energy and being exposed to the threat of energy and capacity shortages.”
Russia legalized cryptocurrency mining in 2024, taking advantage of its competitive advantages such as cheap and abundant energy. But Moscow urged Putin to comment as miners were not ready at the speed of turning energy surplus into shortages.
“We were pleased that there was an surplus of electricity in some areas. But they started mining there… we had to make a specific decision.”
Speaking at this month’s economic forum, the Russian president justified mining restrictions introduced in certain regions of the country facing increased power disruptions as a result of the rapid growth of mining.
In the past few months, mining has been partially or completely banned in energy-deficient areas, from Siberia to the North Caucasus and even occupied Ukraine. The initial temporary restrictions have been extended to a six-year ban in some cases.
Among other proposals discussed at government conferences is the idea of introducing mandatory labeling and certification for foreign mining equipment imported into the Russian Federation.
It comes after Deputy Minister Petr Konishenko revealed that his department has joined forces with the Federal Tax Services and the Ministry of Digital Development to establish a special register of devices used in digital construction. In early July, officials said:
“Registration allows us to accurately identify consumers using electricity to meet the needs of the mining industry.”
The revised regulations must be submitted for government approval by the end of the current quarter. The federal and local governments will then begin phased implementation in areas with aggressive restrictions on the mining of Bitcoin and other cryptocurrency.
Elsewhere, mining is permitted as long as both the company and the individual entrepreneurs register with the tax authorities, but less than a third of mining companies do that. Registration is not required for burning amateur miners under 6,000 kWh each month.
Meanwhile, Russian law enforcement and other agencies are destroying illegal crypto farms across the country to limit financial losses to state and utility works. In June, the Rosseti Grid operator said they would work with the telecom company to drive illegal miners down by tracking internet traffic.