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Despite stringent regulations introduced in late 2024, Russian authorities report that a staggering 70% of crypto miners remain unregistered crypto miners, operating outside legal oversight.
Finance Ministry official Ivan Chebeskov confirmed that only 30% of mining businesses have joined the Federal Tax Service Register, leaving the vast majority in the shadows.
The government had hoped to bring transparency to the sector with two key bills enacted in October and November 2024, defining crypto mining and mandating registration.
However, enforcement has struggled to curb the rise of unregistered crypto miners, prompting discussions of harsher penalties, including fines up to 2 million rubles ($25,500)—ten times the current penalty, according to the Finance Ministry.
Experts argue that Russia’s mining laws contain critical flaws, discouraging legal participation. Nikita Zuborev, chief analyst at BestChange, noted that the regulations “only pave the way for taxation” without offering clear legal protections. Additionally, restrictions on foreign miners and regional bans have further fueled underground operations.
Unregistered crypto miners continue to thrive due to weak enforcement and high profitability. Many operate in remote areas or disguise farms as data centers, making detection difficult.
Authorities are stepping up efforts to dismantle underground operations. On June 9, law enforcement raided a garage-based mining farm in Bataysk, seizing 13 mining rigs. A criminal case was opened under Article 165 of Russia’s Criminal Code, which covers property damage via fraud.
This follows a broader trend of crackdowns on unregistered crypto miners, with officials warning that more raids are imminent. The digital development ministry is also drafting stricter penalties to force compliance.
The proposed 2 million ruble fine is a sharp escalation from the current 200,000 ruble penalty. However, skeptics question whether financial penalties alone can curb the appeal of underground mining.
With cheap electricity and lax oversight in some regions, many unregistered crypto miners still see higher profits in evasion than in compliance. Unless Russia offers incentives—such as tax breaks or legal protections—experts predict the underground market will persist.
Russia ranks among the world’s top three Bitcoin mining hubs, thanks to its low energy costs. However, the prevalence of unregistered crypto miners could complicate international sanctions enforcement, as illicit mining may help bypass financial restrictions.
If Moscow fails to regulate the sector effectively, it risks losing control of a multi-billion-dollar industry—while empowering shadow economies.
Russia’s battle against unregistered crypto miners is far from over. With 70% still operating illegally, authorities face an uphill struggle. Stricter fines and raids may help, but without better incentives, the underground mining boom could continue unchecked.
