Russian authorities plan to prohibit crypto mining in occupied Ukrainian territories, marking a new regulatory step as the conflict surpasses 1,000 days.
Russian’s Deputy Prime Minister Alexander Novak convened a meeting with senior officials to address the country’s strained electricity supply during the peak autumn and winter seasons. The focus included the energy challenges driven by crypto mining, particularly in regions with limited power capacity.
Russia’s Crypto Mining Restrictions Can Last Till 2031
According to reports from the Moscow Times, the proposed ban will cover territories under Russian control, including Donetsk, Lugansk, Zaporizhia, and Kherson. The government aims to curb mining activities in these areas, citing the impact on local electricity grids.
In the North Caucasus and occupied regions of Ukraine, a full ban on mining will take effect starting December 2024.
Also, crypto mining in Siberia will be suspended from December 1 to March 15, 2025. Similar restrictions will apply annually from November 15 to March 15 until 2031.
“Starting Dec 2024, Russia’s Energy Ministry is clamping down on mining rigs in energy-stressed zones like Irkutsk, Chechnya, and DPR. The takeaway’s clear: energy ≠ infinite, and miners might need to get stealthy or pivot,” Maria Nawfal wrote on X (formerly Twitter).
Putin’s government has been considering several changes to Russia’s crypto regulations in the past few months. The new law allows direct regulation of mining pools, while support for using crypto as a payment method remains strong.
Last week, the government revised its crypto taxation policy. Under the new rules, cryptocurrency is classified as property for tax purposes. Income from mining will be taxed based on its market value at the time of receipt.
However, miners can also deduct expenses incurred during operations, easing some financial pressure on the industry. Cryptocurrency transactions will be exempt from value-added tax (VAT).
Instead, earnings will be taxed under the same framework as securities. This will cap the personal income tax on crypto-related income at 15%.
Additionally, reports indicate that Russia is moving forward with plans to establish national cryptocurrency exchanges. These exchanges are likely to be based out of St Petersburg and Moscow.
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