Lawyers highlight shortcomings in Russia’s mining bill

The mining bill in Russia is a positive signal for the legalisation of cryptocurrencies, but it appears underdeveloped and misaligned with other regulatory initiatives for the industry. Lawyers consulted by ForkLog said as much.

They welcomed the development of the document aimed at legalising mining.

“In fact, the legislation defines mined assets as property under Russian law, which is a very positive step toward resolving the legal status of cryptocurrency in Russia,” said ForkLog’s GMT Legal managing partner Andrey Tugarin.

The amnesties proposed in the document also aid the legalisation of crypto mining, lawyers say. For a year, miners will be exempt from taxes, customs declarations of equipment and a number of other obligations. Such incentives will be a plus for business, said Evgeny Kravchenko, a lawyer with DRC, RosKomSvoboda.

At the same time, the document looks quite “raw” and leaves more questions than answers, said Yefim Kazantsev, expert at Moscow Digital School.

Under the bill, individuals may mine provided they register as individual entrepreneurs or self-employed and are listed in a special registry, if they consume electricity above government-set limits.

However, such wording allows two interpretations regarding individuals who do not exceed this limit, the expert noted:

“It remains unclear whether the authors wanted to ban this ‘balcony’ mining or, on the contrary, to free small miners from having to register in the mining participants registry. This clearly requires refinement.”

Kazantsev also noted that the document provides a definition of a mining pool, but no special rules governing this category have been established. The bill also does not address mining taxation, he says.

Evgeny Kravchenko emphasised that the bill does not specify consequences for those who do not wish to register in the registry.

Tugarin pointed to a more complex conceptual apparatus and the mismatch of certain provisions with other bills — specifically with the Finance Ministry’s draft “On Digital Currency”. They differ in the definition of mining.

According to Yefim Kazantsev, it would be more logical to include mining provisions in the Finance Ministry’s “On Digital Currency” bill.

“In light of what has been said, I do not think this bill will be adopted in its current form. Its provisions require substantial revision. And, overall, there are doubts about the advisability of such superficial and fragmented regulation,” he concluded.

Andrey Tugarin believes that one law for regulating the entire crypto industry is not enough.

“Separate laws are needed. The Finance Ministry’s draft is aimed at digital currency, not mining. For regulating cryptocurrencies, more clarifying laws are needed, but all of them must intersect conceptually, otherwise this will not work,” the lawyer emphasised.

He also noted that by the third reading both the Finance Ministry’s bill and the current document may undergo significant changes.

In April, the mining bill in Russia was submitted to the State Duma. The Finance Ministry’s draft “On Digital Currency” is still being refined.

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