Russia has recently cracked down on cryptocurrency operations, going so far as to ban mining in 10 regions through March 2031 amid an energy crisis and issues with grid instability.
However, unregistered miners continue to operate. As reported by Cointelegraph, 70% of miners have failed to register with the Federal Tax Service Register since the end of 2024.
"When introducing mining regulations, our general approach was to bring this industry out of the shadows as much as possible. We have not yet completed this process," Finance Ministry official Ivan Chebeskov told local news agency TASS, according to the report.
Now, authorities appear to be considering harsher penalties for illegal miners. Cointelegraph cited a report from Forbes Russia that indicated the country's Digital Development Ministry was proposing legislation to increase fines for illegal crypto mining operations from 200,000 rubles (around $2,500) to 2 million rubles ($25,000).
Russia isn't alone in grappling with how to manage a surge of crypto mining and its effects — which include both pros and cons.
On the plus side, crypto mining can create jobs and revenue for communities worldwide. A number of energy experts also believe the industry could speed up the adoption of renewable energy sources, such as wind and solar, leading to a cooler, cleaner future.
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To that end, one of the world's largest bitcoin holders invested in a wind farm to help power some of its operations. A recent study from the University of Cambridge in England also found that more than 52% of Bitcoin mining now uses sustainable energy — nearly a 15-point uptick from a 2022 estimate.
However, crypto mining relies on powerful computers housed in data centers to securely validate transactions, and that can come with a lot of noise. In Texas, for example, Granbury residents have complained that a 24/7 proof-of-work mining operation has led to permanent hearing loss, tinnitus, and vertigo, and has significantly reduced their quality of life.
What's more, while increasingly energy-efficient ways of mining are emerging, the data centers that crypto mining relies on generally require massive amounts of energy to operate. Regardless of energy source, that can lead to blackouts and higher electricity prices if the grid isn't properly equipped to handle the situation and policies aren't in place to protect consumers.
Critics of Russia's crypto laws passed in late 2024 say that the country hasn't fully legalized mining, per Cointelegraph, leading to increased taxation without clarity and potentially closing the door on all of the benefits crypto could bring.
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The temperature in my home 🌡️ Yet one representative of a crypto mining firm suggested to the outlet that Russia's attempts at regulating crypto were a positive step toward developing a sector that continues to "thrive."
"The adoption of new laws in November that allow legal entities to put mining equipment on their balance sheets and pay taxes is an important step for the industry," Prostomining's Vyacheslav Kopylov said, adding that local industry events have featured crypto businesses.
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