Putin Enacts New Crypto Mining Law Giving Tax Authorities Control Over Registries

Putin Enacts New Crypto Mining Law Giving Tax Authorities Control Over Registries

Russian President Vladimir Putin has officially signed a new law that transfers control of a crypto mining registry to the Federal Tax Service (FTS) of Russia. This new regulation marks a significant step in the nation’s efforts to formalize and regulate the cryptocurrency mining sector, which has been largely unregulated until now.

According to a report by Izvestia, the FTS will oversee a registry specifically designed for industrial crypto miners. Home-based miners are exempt from registering, provided they do not exceed specific energy usage caps. This law is an amendment to a previous bill that fast-tracked through the State Duma earlier this year, which initially placed control of the registry under the Ministry of Digital Development. The decision to hand control to the FTS highlights the government's intention to enhance its ability to tax and monitor the activities of crypto miners effectively.

The new law empowers the tax authorities to monitor all activities of industrial crypto miners, including transactions related to currency and sales. This oversight will grant the FTS access to critical information about crypto asset movements, including transaction histories and identifier addresses. Additionally, other government agencies, including Rosfinmonitoring, Russia’s anti-money laundering body, and the Federal Security Service (FSB), will also gain access to transaction data, significantly expanding the state’s reach into the crypto sector.

A notable feature of the new legislation is the provision allowing regional authorities to impose temporary local bans on crypto mining operations. This clause responds to energy supply issues in regions such as Buryatia, where miners in nearby Irkutsk have been blamed for exacerbating power problems. Irkutsk has become known as Russia’s unofficial Bitcoin mining capital, but authorities there have initiated crackdowns on illegal mining operations, citing their detrimental impact on the regional power grid.

While the new regulations may raise concerns among some miners, there are indications that the law could alleviate previous worries stemming from proposals by the Ministry of Energy. Earlier suggestions included mandatory shutdowns of legal mining operations for extended periods each year to mitigate energy supply issues.

Russia is clearly eager to learn from past mistakes observed in regions like Abkhazia, where unchecked crypto mining has led to prolonged electricity shortages and blackouts. In light of this, Putin appears focused on accelerating the country’s transition to a more regulated crypto environment. Following years of regulatory indecision, Moscow is now working on multiple legislative proposals aimed at establishing a comprehensive framework for the industry.

The new law has been generally welcomed by industrial crypto miners, who believe that allowing the FTS to supervise their activities will not only provide legitimacy to the sector but also contribute millions of dollars to the national treasury annually. The mining industry is optimistic that this move signifies a step towards formal recognition and regulation of a sector that has previously operated in the shadows.