Russian authorities are preparing to ban crypto mining in the capital, neighboring Moscow region and parts of the Kursk region for the next six years.
The news comes after reports that mining could be restricted across central Russia, with the introduction of tougher penalties for illegal miners.
Russian government considers ban on mining in Moscow
A Russian government committee in charge of the electricity industry has recommended banning cryptocurrency mining in more regions of the country.
The planned total ban is expected to cover the city of Moscow and the surrounding Moscow region, as well as some areas of the Kursk region, media reports revealed.
In an interview with the state news agency TASS, Russia’s Deputy Energy Minister Evgeny Grabchak stressed that the proposed ban could last until at least 2032.
The issue had been raised by local officials, RBC reported, and the ministry announced late last month, adding that it would be resolved taking into account the officials’ position on the issue.
Moscow Oblast Energy Minister Sergei Volopanov has previously said that while crypto mining does not bring benefits to the local economy, the ban has already had a positive effect in other regions.
The region’s governor, Andrei Vorobyov, and Moscow’s mayor, Sergei Sobyanin, both proposed introducing restrictions on mining, crypto news outlet Bits Media recalled in a post.
At least 65 data processing centers with a total capacity of 734 MW are connected to the electricity grid of the two territories, according to data from Russia’s Ministry of Energy.
Governor of Kursk Oblast Alexander Hinshteyn proposed similar measures for eight districts and the city of Lugov, noting that the war in neighboring Ukraine has exacerbated electricity supply problems in the oblast.
The administration argues that the mining ban will increase local reserves and save electricity for other consumers, including both residential and industrial areas.
Mining may be banned in the rest of central Russia
According to a recent article in the business daily Kommersant, the Russian government is considering banning cryptocurrency mining in a total of 19 regions covered by Moscow’s electricity grid.
If that happens, cryptocurrency activity will be curbed throughout the Central Federal District, the economic center of the vast country.
The country legalized mining in 2024, hoping to monetize its competitive advantage of abundant energy resources and cool climate conditions.
However, mining companies concentrated in certain regions where electricity prices were low, resulting in energy shortages.
To combat power shortages, Russian regional and federal authorities last year banned the minting of digital currencies in 13 regions until spring 2031.
The affected areas include Irkutsk Oblast, the Republic of Buryatia, the Siberian region of Zabaikalsky Krai, most of Russia’s republics in the North Caucasus, and four oblasts of occupied Ukraine.
Russia sends illegal cryptocurrency miners to prison
Meanwhile, the State Duma moved to criminalize illegal mining in Russia. On Wednesday, Moscow’s Duma passed each bill on first reading.
The law introduces severe penalties, including fines, forced labor, and imprisonment, for those who engage in such activities or use stolen energy without registering.
The punishment will depend on the damage caused in each case and the severity of the violation, news agencies RIA Novosti and Prime reported.
Those who operate mining facilities in defiance of the law, generating significant income or causing significant economic losses, can be fined up to 2.5 million rubles ($35,000).
Miners who conduct illegal operations as part of an organized crime group face up to five years in prison, forced labor, and additional fines.
Additionally, authorities will be able to confiscate the property of such individuals and entities. At the same time, paying damages may exempt the guilty party from criminal prosecution.
Individual entrepreneurs and companies are now allowed to mine cryptocurrencies in Russia, which remains one of the world’s leading Bitcoin mining regions, provided they register with the state and pay taxes.
However, according to the bill’s explanatory text, fewer than 1,500 of Russia’s estimated 50,000 cryptocurrency mining companies have so far operated such operations.
