The Russian government plans to ban cryptocurrency mining in the occupied territories of Ukraine, marking a new adjustment as the conflict has lasted more than 1,000 days.
Russian Deputy Prime Minister Alexander Novak has convened a meeting with senior officials to address the country's tense electricity supply situation in the fall and winter. The focus includes the energy challenges posed by cryptocurrency mining activities, particularly in areas with limited electricity supply.
Russia's Cryptocurrency Mining Restrictions May Last Until 2031
According to a report from the Moscow Times, the proposed ban will cover the territories under Russian control, including Donetsk, Luhansk, Zaporizhia, and Kherson. The government aims to limit mining activities in these areas, citing the impact on local power grids.
In the North Caucasus and the occupied regions of Ukraine, a complete ban on mining will take effect starting in December 2024. Additionally, cryptocurrency mining in Siberia will be suspended from December 1, 2024, to March 15, 2025. Similar restrictions will be applied annually from November 15 to March 15 until 2031.
"Starting in December 2024, the Russian Energy Ministry will tighten the activities of mining farms in energy-deficient regions like Irkutsk, Chechnya, and the DPR. It's clear that: energy is not infinite, and miners may need to find ways to hide or redirect,"
Maria Nawfal wrote on X (formerly Twitter).
Putin's government has been considering several changes to Russia's cryptocurrency regulations in recent months. New laws allow for the direct management of mining pools, while support for the use of cryptocurrencies as a means of payment remains strong.
Russia's average monthly hash rate in global Bitcoin mining. Source: World Population ReviewLast week, the Russian government revised its cryptocurrency tax policy. Under the new regulations, cryptocurrencies are classified as assets for tax purposes. Income from mining will be taxed based on the market value at the time of receipt. However, miners will also be able to deduct operating expenses, reducing some of the financial burden on the industry. Cryptocurrency transactions will be exempt from value-added tax (VAT).
Instead, income will be taxed under the same framework as securities. This will limit the personal income tax on cryptocurrency-related income to 15%. Additionally, reports indicate that Russia is moving forward with plans to establish national cryptocurrency exchanges. These exchanges are likely to be located in St. Petersburg and Moscow.
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