Bill on Mining in Russia Introduced to the State Duma

A bill ‘On Mining in the Russian Federation’ was introduced to the State Duma of the Russian Federation, regulating the cryptocurrency mining sector.

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The explanatory note accompanying the document states that the absence of regulatory framework leads to issuance and operations with cryptocurrencies in the ‘grey’ zone.

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The bill defines mining as activity using objects of the Russian information infrastructure and equipment located on the territory of the Russian Federation.

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The document also contains concepts such as the organization of the circulation of digital currencies, a mining pool, and a mining operator.

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The bill envisages the creation of a special register by an ‘authorized federal body’. Both individuals and mining operators may engage in cryptocurrency mining subject to inclusion in the register.

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Individuals must also register as individual entrepreneurs or self-employed persons if their electricity consumption exceeds government-set limits.

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If the law is adopted, a one-year amnesty will apply to registry participants from the date it comes into effect for:

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• customs clearance of equipment imported before the law takes effect;
• the filing of income declarations from mining and informing the tax authorities about mined cryptocurrencies;
• payment of value-added tax on mining-related operations conducted before the law takes effect;
• compliance with currency regulation and control laws, and related measures governing the outbound transfer of funds from the Russian Federation, in force since 8 March 2022.

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The mining definition and its basic regulatory mechanisms are set out in the Ministry of Finance «On Digital Currency» draft, which has not yet been adopted.

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Earlier, the ministry changed the provisions in the document relating to cryptocurrency mining. It also envisages the creation of a registry for miners.

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The Russian Energy Ministry backed legalization of mining and proposed the introduction of regional quotas. Anatoly Aksakov, head of the State Duma Committee on the Financial Market, says such activity in Russia should be allowed only for legal entities.

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