Authorities Crack Down on Unauthorized Crypto Activities
Russian authorities are planning to introduce criminal liability for illegal cryptocurrency mining, intensifying efforts to bring the sector out of the shadows and reduce its significant energy consumption. This announcement follows an ongoing crackdown on unauthorized coin minting activities across the country, particularly those that illegally utilize stolen electricity.
Moscow Targets Miners Operating Outside Russian Law
The Russian executive power intends to impose criminal liability for illegal crypto mining, alongside administrative liability for lesser violations of the legislation that governs the industry. This plan was publicly announced by Russian Deputy Prime Minister Alexander Novak, who also indicated that the federal government is preparing harsher penalties for individuals offering illegal lending services.
Novak, as quoted by the RIA Novosti news agency, emphasized that Moscow aims to comprehensively regulate the circulation of decentralized digital money within the country's economy starting next year. He elaborated on the legislative plans:
We will legally regulate the issue of digital currency circulation, and also establish administrative liability for violations of legislation on digital currency mining and criminal liability for illegal mining.
Speaking at a meeting of the Russian Federation’s Council for Strategic Development and National Projects, Novak added:
And we will tighten responsibility, up to and including criminal liability, for individuals illegally engaged in providing consumer loans.
This governmental move aligns with the Central Bank of Russia's recent decision to require credit institutions to link bank accounts to personal tax identification numbers. According to Olga Polyakova, Deputy Governor of the Central Bank of Russia, this measure is crucial for the effective operation of the "Antidrop" platform, which the regulator plans to launch in 2027. The monetary authority intends to use these tax numbers to identify "droppers," individuals exploited by fraudsters to launder illicit funds. Funds stolen from victims are frequently converted to and from cryptocurrency, often facilitated through bank cards and accounts registered under the names of these individuals. Critics have pointed out that such measures, including limits on ATM cash withdrawals and the blocking of bank accounts for suspicious transactions, not only target scammers but also impact legitimate crypto traders, especially those involved in peer-to-peer exchanges.
Russia Intensifies Crackdown on Illegal Crypto Mining
Cryptocurrency mining became Russia's first officially regulated crypto activity following the adoption of specific legislation in 2024. This law permits legal entities, individual entrepreneurs, and ordinary citizens to engage in mining as a legitimate business. While registered entities must comply with the Federal Tax Service (FNS), individuals can mine digital coins without registration, provided their monthly electricity consumption remains below 6,000 kWh.
However, recent estimates indicate that less than a third of all mining operations have registered with the state. Both licensed and unauthorized miners have been implicated in causing electricity shortages in areas with a high concentration of crypto farms. Despite local and federal authorities issuing temporary or permanent bans on mining in approximately a dozen regions, illegal mining activities persist, often utilizing stolen electricity and defying stringent restrictions, as previously reported.
The crackdown on these operations has intensified, with joint raids conducted by utility company employees and police officers, now actively supported by agents of the Federal Security Service (FSB). The methods employed in this enforcement are becoming increasingly sophisticated. Investigators are now tracking energy consumption and internet traffic with the assistance of smart electricity meters and Russian telecommunications providers. Authorities are even deploying drones equipped with thermal cameras to locate illegal crypto farms.
Concurrently, miners are adopting more inventive strategies to evade detection. Law enforcement frequently encounters mobile mining farms with hardware installed in the rear of cargo vehicles, or mining equipment concealed in abandoned industrial and farm buildings that still have access to the power grid.