Russia Crypto Mining Bill Finally Set for Parliament

CryptoNews.com

2024-07-14 19:00:10

Tim Alper

Last updated:

July 14, 2024, 23:00 EDT | 3 min read

Russia may finally be set to legalize Bitcoin (BTC) and altcoin mining after a State Duma committee approved a bill for a vote later this month.

TASS reported that the State Duma’s Committee on Financial Markets “recommended that the lower house of parliament” vote in favor of a new bill “on regulating mining in Russia” when it convenes for business on July 23.

Russia Crypto Mining Bill: Progress at Long Last?

The bill is the brainchild of a “group of lawmakers from different factions.” Crucially, however, one of its signatories is the chairman of the State Duma Committee on Financial Markets, Anatoly Aksakov.

Aksakov is the de facto chief architect of Russia’s crypto-related legislation. While the nation is yet to make much progress with crypto regulation, it is unlikely that Aksakov would put his name on a bill that stands no chance of success.

The bill appears to be the fruit of several months of intense lobbying from the Russian industrial crypto mining sector.

The sector has been pleading with Moscow to legalize industrial mining for several years. While this would mean miners would have to start paying taxes on their incomes, it would also open the door to potential investors.

Currently, miners operate in a legal “grey zone,” whereby mining is neither legal nor illegal. At present, power companies can only shut down miners they suspect of stealing electricity for their grids.

A suspected illegal crypto mining “farm” in Russia. (Source : AktisTV/YouTube)The first version of the private member’s bill circulated back in November 2022. But the newest version of the bill proposes giving regulatory powers to both the Russian government and the Central Bank.

It also proposes giving the Ministry of Digital Development powers to “monitor” the way miners “implement” new requirements.

The bill further proposes allowing Russian firms and “individual entrepreneurs” the “right to mine” coins if they sign up to a central “register.”

Russian imports from China began to recover in June despite difficulties with foreign trade payments, triggered by the US’s threat of secondary sanctions

— Bloomberg (@business) July 12, 2024

However, the bill could spell good news for home-based and smaller-scale miners. The bill dictates that individuals “who do not exceed established energy consumption limits will have the right to mine digital currency without being included in the register.”

Previous draft mining bills proposed an outright ban on all forms of private mining. They also proposed letting power providers “hunt” home-based miners.

The bill further proposes “introducing a set of measures to control the circulation of [cryptoassets] to prevent its use for illegal purposes.”

Miners Would Have to Abide by AML Protocols Under Draft Law

If the bill passes, miners will reportedly be required to “report” how much crypto they have mined and show the “addresses where it is stored” to the authorities.

The nation’s anti-money laundering agency Rosfinmonitoring will also “create a list of suspicious addresses associated with money laundering and terrorist financing.”

The bill also seems to address many concerns voiced by the Ministry of Energy and power companies.

It proposed giving the government the right to “impose a ban on mining in certain parts” of the country.

Iris Energy’s shares fell the most since January after Culper Research questioned the Bitcoin mining company’s ability to serve the high performance computers which make generative AI possible.

— Bloomberg Markets (@markets) July 11, 2024

The Ministry of Finance has also reportedly created its own “response.” Interfax reported that the ministry wants to limit crypto exchange access to a “small group of [professional] investors.”

Ministry Wants More Crypto Regulation

The ministry also reportedly wants to fast-track crypto laws that would help Russian firms do global business.

Currently, many firms are hampered by Western sanctions that prevent companies from trading with Russian businesses.

Moscow sees crypto as a possible workaround, following the example of countries like Iran and Venezuela.

The US designated Venezuela’s Tren de Aragua gang as a transnational criminal organization that is expanding into the US.

— Bloomberg (@business) July 11, 2024

The ministry wants to “allow” all “participants in foreign economic activity” to make settlements “in digital currencies.”

Industry officials estimate that 90% or more of Russian crypto miners focus their efforts on BTC. A smaller percentage instead chooses to mine altcoins like Litecoin (LTC).

News of the bill’s progress will come as a relief for many miners. In March, Aksakov opined that crypto regulation would likely be delayed until 2025.

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