Russia's New Cryptocurrency Mining Law: Everything You Need to Know

Cryptocurrency mining in Russia has officially emerged from the shadows. The new law, which came into effect on November 1, 2024, not only legalized digital currency mining but also introduced strict regulations that every participant must adhere to. Let's look at what's changed, what's now allowed, what's prohibited, and how to mine legally—or more simply, without unnecessary complications.Briefly about the changesMining LegalizationIndividual entrepreneurs and companies can legally mine only after registering in a special registry with the Federal Tax Service (FTS).Individuals are allowed to mine for personal use without registering in the registry, while adhering to energy consumption limits.Mandatory ReportingAll miners—from large operators to home enthusiasts—are required to provide data on the cryptocurrency they mined and the wallets they use to the tax service.TaxationTax rates have been introduced for individuals, sole proprietors, and companies.Regional BansIn regions with electricity shortages, mining will be partially restricted or completely banned. The list of energy-deficient regions has already been published.Advertising BanPromoting mining and cryptocurrency-related services is now prohibited. This applies to both direct advertising and any other marketing activities.What is PermittedFor Legal Entities and Sole ProprietorshipsMining has become legal subject to registration in the "MiningRegister" on the FTS website. This registry covers both miners themselves and mining infrastructure operators, such as data centers and equipment rental services.For individualsIndividuals are permitted to mine for personal use without registering in the registry, as long as their energy consumption does not exceed 6,000 kWh per month. Exceeding this limit requires registration as an individual entrepreneur.Sale and purchase of equipmentThe use, purchase, and sale of mining equipment remain completely legal. This applies to both individual devices (ASIC miners) and large mining farms.Commercial UseIndividual entrepreneurs and companies can sell mined cryptocurrency, export it, or use it in their business processes.What is ProhibitedMining in Energy-Deficient RegionsStarting December 1, 2024, a complete ban will apply to Karachay-Cherkessia, Kabardino-Balkaria, North Ossetia, Ingushetia, Chechnya, Dagestan, the Kherson and Zaporizhzhia Oblasts, as well as the territories of the Donetsk People's Republic (DPR) and Luhansk People's Republic (LPR). The restrictions will be in effect until March 15, 2031.In the Irkutsk Region, Buryatia, and the Zabaykalsky Krai, a complete ban on mining will take effect from December 1, 2024, to March 15, 2025. Subsequently, mining in these regions will be prohibited only during the winter period—from November 15 to March 15—when power grids are operating at their maximum capacity.Exceeding the Energy Consumption Limit for IndividualsIndividuals are only permitted to mine if their energy consumption does not exceed 6,000 kWh per month. Exceeding this limit without registering as an individual entrepreneur and being included in the registry is prohibited.Advertising Cryptocurrency and MiningAny advertising of cryptocurrency, mining services, or digital asset exchange is now prohibited. This applies to both traditional advertising channels and online platforms.Reporting ViolationsMiners are required to report information about mined coins and the wallets used to which funds are deposited to the Federal Tax Service. They are also required to provide this information upon request from other government agencies, such as the FSB, Rosfinmonitoring, and Rosimushchestvo. Violating these requirements is punishable by fines and sanctions.Combining Mining with Electricity ProductionCompanies and individual entrepreneurs are prohibited from combining mining with the sale, production, or transmission of electricity. Activities related to the dispatching of power systems are also prohibited.Restrictions for Individual Entrepreneurs and Company DirectorsMining is prohibited for individuals with a criminal record for crimes against the state, economic crimes, or those included on lists of extremists and terrorists.What about taxes?Another important aspect of the legalization of mining is taxes. Now, anyone involved in cryptocurrency mining must consider their tax obligations. The law clearly regulates this area. Here's what you need to know:IndividualsIncome from mining is subject to personal income tax (PIT). Starting in 2025, a progressive tax scale will be in effect: the rate depends on earnings and ranges from 13% to 22%.Sole Proprietors and CompaniesThe income of entrepreneurs and companies is subject to a 20% profit tax. Starting in 2025, the rate will increase to 25%.Cryptocurrency Transactions