Russian authorities intend to ban cryptocurrency mining in the occupied territories of Ukraine, marking a new regulatory step as the conflict exceeds 1,000 days.
Russian Deputy Prime Minister Alexander Novak held a meeting with senior officials to resolve the country’s electricity supply problem during the fall and winter peak seasons. The meeting focused on the energy challenge posed by cryptocurrency mining, especially in areas with limited electricity capacity.
Russian Cryptocurrency Mining Restrictions May Extend Until 2031
According to report from the Moscow Times, this proposed ban would include territories under Russian control, including Donetsk, Lugansk, Zaporizhia and Kherson. The government aims to limit mining activities in these areas, because of the impact on the local power grid.
In the North Caucasus and occupied regions of Ukraine, a comprehensive mining ban will be imposed from December 2024.
Furthermore, cryptocurrency mining in Siberia will be suspended from December 1 to March 15, 2025. The same restrictions will apply annually, from November 15 to March 15. 3 until 2031.
“Starting from December 2024, the Russian Ministry of Energy tightens exploitation in energy pressure areas such as Irkutsk, Chechnya and DPR. The message is clear: energy is not limitless, and miners may need to be careful or redirect,” Maria Nawfal write on X (formerly Twitter).
Putin’s administration has been considering a number of changes to Russia’s cryptocurrency regulations over the past few months. The new law allows for direct regulation of mining pools, while the use of cryptocurrencies as a payment method remains strongly supported.
Last week, the government revised its tax policy on cryptocurrencies. According to the new regulations, cryptocurrencies are classified as property for tax purposes. Mining income will be taxed based on the market value at the time it is received.
However, miners can also deduct costs incurred during operations, easing the financial pressure on the industry. Cryptocurrency transactions will not be subject to value added tax (VAT).
Instead, income will be taxed under the same bracket as stocks. This would limit personal income tax on cryptocurrency-related income to 15%.
Plus, reports indicate that Russia is moving forward with plans to establish national cryptocurrency exchanges. These exchanges will likely be located in St Petersburg and Moscow.