Russian government readies tougher rules for miners

Russia is preparing to impose new restrictions on cryptocurrency miners, including stricter punishments for violating existing bans and illegal mining activities.

One of the proposed measures will allow authorities to remotely disconnect crypto mining facilities from the grid during periods when demand for electricity is at its highest.

Russian government readies tougher rules for miners

The Ministry of Energy in Russia has been tasked to finalize regulations for those involved in the extraction of digital currencies, the Interfax news agency reported, following a recent meeting of the Cabinet of Ministers in Moscow.

According to a report issued after the meeting chaired by Deputy Prime Minister Alexander Novak, the updated rules include introducing greater liability for illegal connection to distribution networks, electricity theft, and violation of imposed mining bans.

Furthermore, crypto miners will be added to a new category of consumers of lesser importance, for which the reliability of power supply is far from guaranteed.

The energy ministry is now expected to develop “a mechanism for redistributing the released capacity when limiting mining activities in a region in order to connect socially significant consumers to the power grid,” the document detailed.

Russia wants to unplug mining farms remotely

The Russian government explained that the establishment of the new “fourth” consumer category actually means having the option to “introduce remote restrictions on consumption during peak loads and under threat of energy and capacity shortages.”

Russia legalized cryptocurrency mining in 2024 to exploit its competitive advantages, such as cheap and abundant energy. But Moscow was caught unprepared for how quickly miners managed to turn energy surpluses into shortages, prompting Putin to comment:

“We were happy we had electricity surpluses in some regions. But they began mining there … We had to make certain decisions.”

Speaking at an economic forum this month, the Russian President justified the mining restrictions introduced in certain parts of the country that have been facing increasing power deficits as a result of the rapid growth of the mining industry.

In the past few months, mining has been partially or fully banned in a dozen energy-deficient regions, from Siberia to the North Caucasus, and even in occupied Ukraine. Initial temporary restrictions have been expanded to 6-year prohibitions, in some cases.

Among other proposals discussed at the government meeting is the idea to introduce mandatory labeling and certification for foreign mining equipment imported into the Russian Federation, the crypto news outlet Bits.media noted in a post on Friday.

It comes after Deputy Energy Minister Petr Konyushenko unveiled that his department has joined forces with the Federal Tax Service and the Ministry of Digital Development to establish a special register for devices used for digital minting. In early July, the official stated:

“The register will allow us to accurately identify consumers using electricity for mining needs.”

The revised regulations must be submitted for government approval by the end of the current quarter. Then, federal and local authorities will begin their gradual implementation in regions with active restrictions on the mining of Bitcoin and other cryptocurrencies.

Elsewhere, both companies and individual entrepreneurs are allowed to mine as long as they register with the tax authority, but less than a third of mining enterprises have done that. The registration is not mandatory for amateur miners burning less than 6,000 kWh monthly.

Meanwhile, Russian law enforcement and other agencies have been busting illegal crypto farms across the country to limit financial losses for the state and utilities. In June, the Rosseti grid operator said it’s working with telecom companies to hunt down illegal miners by tracking their internet traffic.