Russia’s new crypto law, signed by President Vladimir Putin and taking effect on November 1, 2024, marks a significant escalation in government control over digital assets. The legislation, published by the Russian government on Friday, broadens the scope of digital currency regulations, particularly targeting mining activities and related infrastructure nationwide.
Regional Mining Restrictions and Infrastructure Oversight
The law empowers the Russian government to implement mining restrictions based on geographic location. Authorities can define specific procedures and circumstances for banning mining operations, and a key provision allows the government to halt digital currency mining pools in certain areas. Additionally, the government now has authority to regulate infrastructure providers that support mining operations, including energy suppliers and hardware vendors. This move aims to centralize control over the energy-intensive industry, which had previously operated in a relatively unregulated environment.
Enhanced Transaction Monitoring and Anti-Money Laundering
Beyond mining, the law expands access to digital currency identifier addresses for multiple federal agencies, not just the Federal Financial Monitoring Service (Rosfinmonitoring). Federal executive agencies and law enforcement bodies are now granted access, bolstering their capability to track transactions potentially linked to money laundering or terrorist financing. This cross-agency data sharing is designed to create a comprehensive surveillance network over crypto movements within Russia.
Transfer of Mining Registry to Tax Authorities
Responsibility for the national mining register has been transferred from the Ministry of Digital Development to the Federal Tax Service. The tax service will now oversee mining registrations for businesses and remove those with repeated infractions. Individual miners can continue operating without registration as long as they adhere to specific electricity consumption limits. However, companies and individual entrepreneurs must comply with new registration requirements, bringing mining activities under formal taxation and compliance frameworks.
Russia's Broader Crypto Strategy
Russia is advancing its crypto regulations while developing a state-backed digital currency, the digital ruble. The country has legalized crypto mining and permitted cryptocurrency use in international trade, aiming to bypass sanctions and reduce reliance on the U.S. dollar. In August, Putin signed legislation allowing experimental frameworks for cryptocurrency use in cross-border transactions. This law enables legal adjustments for international crypto payments, with pilot projects overseen by the Bank of Russia, and requiring approval from the Finance Ministry, Federal Security Service, and Rosfinmonitoring.
By tightening domestic controls while exploring crypto for international trade, Russia is pursuing a dual strategy: asserting state dominance over digital assets internally while leveraging them externally to circumvent financial restrictions. The new law will likely influence global regulatory approaches to crypto mining and state oversight.