- Russia’s President Vladimir Putin signed a new law that would see the country tighten its grip on crypto mining activities.
- Additionally, the legislation set to take effect on November 1, enables the government to closely regulate the infrastructure supporting crypto mining including the providers of mining equipment and other technological resources.
Russia’s regulatory landscape is set to change with the signing of a new law by President Vladimir Putin. This comes after the government tightened its grip on cryptocurrency mining.
Published on Friday, the Russian government has intensified its oversight of crypto mining activities. Additionally, regional restrictions will be based on energy concerns and the perceived risks of illegal activities.
The Russian government issued a law signed by Putin on October 27, aiming to expand state control over the cryptocurrency sector, including strengthening supervision of cryptocurrency mining activities, giving the government the power to stop mining pool operations, and some…
— Wu Blockchain (@WuBlockchain) October 27, 2024
This law, which will take effect on November 1, empowers Russian authorities to enforce rules on cryptocurrency mining, including the ability to stop mining activities in certain areas where energy consumption can be a concern.
Regional authorities can impose location-specific mining restrictions, allowing the government to control mining locations. This includes the power to shut down digital currency mining pools.
Taking the note a bit higher, the law enables the government to closely regulate the infrastructure supporting crypto mining including the providers of mining equipment and other technological resources.
Previous events have seen crypto face criticism over money laundering and terrorist financing, now in this case, the new regulation highlights the importance of monitoring cryptocurrency transactions to prevent such fraudulent activities.
This legislation bestows upon several federal agencies, including the Federal Financial Monitoring Service (Rosfinmonitoring) and law enforcement entities, expanded authority to access digital currency identifiers.
It is worth mentioning that this law shifts the responsibility for Russia’s national mining register from the Ministry of Digital Development to the Federal Tax Service. This change is intended to streamline mining registrations for companies, which now must comply with additional regulations or face removal from the register if they violate the rules.
On the other hand, individual miners, however, may continue their activities without registration as long as they adhere to specific electricity consumption limits, an allowance that provides some flexibility for smaller-scale operators.
This legislative overhaul comes as Russia explores the potential of cryptocurrencies as a mechanism to bypass Western sanctions and reduce reliance on the U.S. dollar in international transactions via the BRICS initiative.
Earlier this year, Putin signed a separate law that allows for the experimental use of cryptocurrencies in cross-border transactions, which could help the country establish alternative trade channels.
Additionally, The Bank of Russia and other key regulatory bodies, including the Finance Ministry and Federal Security Service, oversee these pilot programs, marking a strategic shift in Russia’s economic policy.
Despite the heavy-handed regulatory approach, the new law allows for digital asset trading on Russian exchanges, including foreign cryptocurrencies. The Central Bank has the power to ban certain digital assets, but registered miners can legally trade their digital assets.
