Russia: 70% of Crypto Miners Still Unregistered
Key Takeaways
Widespread Non-Compliance: Despite new regulations, around 70% of crypto miners in Russia have yet to register with authorities, operating outside the legal framework.
Energy and Infrastructure Strain: Unregistered mining operations are causing power grid overloads and infrastructure issues, especially in energy-rich regions like Siberia.
Stricter Measures Coming: The Russian government is considering tougher enforcement, including mandatory registration, higher penalties, and closer energy usage monitoring.
Despite introducing new legislation regulating the cryptocurrency mining industry, Russian authorities report that approximately 70% of crypto miners continue to operate without official registration.
Overview
The country’s Ministry of Finance and central bank have taken steps to formalise the sector, including recognising crypto mining as a legitimate economic activity and introducing tax obligations. However, the lack of compliance among most operators suggests the regulatory efforts have yet to be fully effective. According to a report by local news agency TASS on Thursday, Deputy Finance Minister Ivan Chebeskov stated that 70% of miners still operate in the shadows.
According to Chebeskov, the authorities struggle to bring crypto miners into the legal framework, even though the sector consumes a substantial amount of electricity and generates notable profits.
“Many mining operations remain in the shadows to avoid taxation and scrutiny,”
he said, noting that this undermines the state’s revenue potential and energy policies. The government is now looking to enhance enforcement mechanisms and possibly introduce stricter penalties for non-compliance.
Energy Concerns and Regional Impacts
Crypto mining in Russia has grown rapidly due to the country’s low electricity prices and vast energy surplus, especially in regions like Siberia. However, unregistered miners pose several challenges. Local officials have raised concerns about overloaded power grids and infrastructure failures in areas where covert mining activity is concentrated. These energy strains often lead to higher electricity costs for residents and disruptions in public services.
Russia’s energy ministry has been working with regional governments to identify illegal mining farms by monitoring abnormal electricity usage patterns. In one recent case, authorities in Irkutsk discovered several large-scale mining operations hidden in residential areas and small businesses. While these facilities can be lucrative, the lack of regulatory oversight increases the risk of accidents and fire hazards due to substandard equipment and setups.
With energy security now a strategic priority, the Kremlin is pushing for more control over how electricity is allocated and used. The ongoing war in Ukraine and resulting international sanctions have also intensified the state’s interest in ensuring that all domestic industries—including crypto mining—contribute to the national economy through proper taxation and legal compliance.
Government Eyes Stricter Enforcement Measures
In response to the widespread evasion of registration, Russian lawmakers are drafting amendments that would tighten oversight and enforcement. These changes may include mandatory registration with a national mining registry, stricter licensing requirements, and real-time energy consumption monitoring. Additionally, officials are considering higher fines and potential criminal charges for those who fail to comply.
Previously doubtful of the crypto sector, the central bank has shifted its stance in light of economic sanctions and declining access to global financial markets. It now supports the controlled development of crypto mining to attract foreign capital and strengthen digital infrastructure. However, this support comes with conditions: transparency, regulatory oversight, and integration with the banking system.
Industry leaders have expressed cautious support for regulation but warn that overly harsh rules could drive miners out of the country. Russia currently ranks among the top five nations for BTC mining, and losing this position could weaken its competitiveness in the global crypto space.
Some mining companies urge the government to balance enforcement and incentives, such as offering tax breaks or energy subsidies for compliant miners. As Russia continues to refine its regulatory approach, the outcome will shape the domestic mining landscape and the country’s broader digital asset strategy. Non-compliance remains a significant obstacle, highlighting the complexities of governing a decentralised and rapidly evolving industry.