While Russia’s cryptocurrency mining sector emerged from legal limbo in mid-2024, the government’s honeymoon with unregulated digital prospectors has decidedly ended. The Ministry of Energy, collaborating with the Federal Tax Service and Ministry of Digital Development, has launched a national registry designed to catalog every crypto mining rig across the federation—a move that suggests Moscow’s patience with electricity-pilfering miners has reached its limit.
The registry represents more than bureaucratic housekeeping; it’s an extensive effort to identify and regulate electricity consumers involved in crypto mining operations. Despite legalization permitting companies and registered entrepreneurs to mine legally (provided they register with tax authorities and pay appropriate levies), a staggering 70% of miners continue operating outside the legal framework as of late 2024. This widespread noncompliance has created an enforcement nightmare that the new registry aims to resolve.
Despite crypto mining’s legalization, 70% of Russian miners still operate illegally, creating a massive enforcement headache for authorities.
The electricity theft problem has reached almost comical proportions. Regional power grids, particularly in Siberia, have experienced significant strain from unauthorized mining operations, with one illegal farm in Krasnoyarsk Krai spanning an impressive 30,000 square meters. These clandestine operations have caused substantial losses for utilities and the state, prompting authorities to deploy internet traffic analysis technology to detect unlicensed miners. The energy-intensive nature of mining operations, which use substantial computing power to perform Proof-of-Work calculations, explains why these illegal facilities consume massive amounts of electricity.
Under current regulations, private citizens can mine without registration only if monthly electricity consumption remains below 6,000 kWh—a threshold that serious mining operations inevitably exceed. The registry enables precise tracking of electricity consumption linked to mining activities, facilitating both regional enforcement efforts and special taxation policies targeting identified miners. To strengthen deterrence, authorities are drafting legislation to increase fines for illegal mining to 2 million rubles, a ten-fold increase from current penalties.
The government’s strategy extends beyond mere identification. Registry data is shared with regional authorities where mining activity is concentrated, supporting local enforcement initiatives and mining bans in energy-constrained areas. This coordinated approach, backed by the Ministry of Industry, represents a significant escalation in Russia’s efforts to formalize its digital mining sector. President Putin has expressed support for regional mining bans in areas facing energy deficits, reinforcing the government’s commitment to addressing power shortages.
The initiative ultimately serves Russia’s broader digital economy ambitions while addressing the immediate problems of energy theft and tax evasion. By integrating registry data with tax enforcement mechanisms, authorities expect to increase state revenues while bringing the majority of unregistered miners into compliance—assuming, of course, that miners prove more cooperative than historically demonstrated.
