As the country gets ready to tax miners, Putin signs the country’s second crypto mining law

Posted by cryptonews Crypto News October 28, 2024 910 Views

When there is a power outage, a new law in Russia will allow miners to temporarily close their rigs.

A new law signed by Vladimir Putin will “transfer control” of a new cryptocurrency mining registry in Russia to the tax authority of the nation.

According to a report from Izvestia, the nation’s Federal Tax Service (FTS) will now take control over a registry of industrial crypto miners.

As long as they do not go over energy usage limits, home-based miners will not have to register with the registry.

Russian Crypto Mining Regulation: Moscow Moving Fast

The new law effectively amends a bill that was expedited through the State Duma earlier this year. The previous bill gave the Ministry of Digital Development control over the register.

However, it appears that the FTS has concluded that in order to carry out its mandate to tax cryptocurrency miners, it must have total control over the register.

Government Agencies Get New Powers

The tax authority will be able to keep an eye on “all of” the “currency” and “sale orders” of commercial cryptocurrency miners thanks to the new law.

The Russian tax authorities will thus “have access to all information about cryptoasset movements,” according to the newspaper. The information contained in this data comprises “identifier addresses and transaction histories.”

Transaction data is also made available to government agencies and investigative organizations under the new law.

These include Russia’s top security agency, the Federal Security Service (FSB), and the government-run anti-money laundering organization Rosfinmonitoring.

Additionally, a number of government-affiliated entities have been granted the authority to search and gather “information upon request.”

Temporary Ban Clause

Temporary bans are the most important subclause in the bill. The act will enable local governments to impose short-term prohibitions on cryptocurrency mining.

This is a clear reaction to energy crises in places like Buryatia. Power outages in the Mongolian border region have been attributed to miners in neighboring Irkutsk.

The unofficial capital of Bitcoin (BTC) mining in Russia is Irkutsk. However, the area has been cracking down on illegal miners in recent months.

It believes that these miners are jeopardizing Southern Siberian grid operations.

However, some miners will probably be happy to hear the news because it could end contentious Ministry of Energy proposals.

In order to prevent possible power outages, the ministry had previously suggested requiring all legitimate miners to close their rigs for a few weeks each year.

A Russian crypto miner showcases his equipment. (Source: Mikhail Baturko/Dzen)

Multiple Bills in Pipelines

Russian officials are keen to learn the lessons of the de facto state of Abkhazia, where crypto miners have been blamed for years of electricity shortages and blackouts.

Putin appears determined to accelerate Russia’s crypto pivot. After years of impasse that left the industry almost entirely unregulated, Moscow is now working on multiple bills that will let it police the sector.

Industrial crypto miners have promised that letting the FTS supervise their activities will help boost the Treasury’s coffers with millions of dollers per year.

The industry welcomed the new law, claiming it was a further step toward the legitimization of an industry that is only now stepping out of the shadows.

New IT Jobs

The BitRiver Communications chief Oleg Ogienko told Izvestia that allowing mining to move “into the legal field” would “help develop the IT sector and create jobs.”

Ogienko and others have also claimed that “legislative measures” will help Moscow combat so-called “gray” (illegal) miners, who “create energy shortages in some regions.”

BitRiver and others have moved quickly since Putin signed the nation’s first crypto mining “legalization” law on August 9.

Russia’s biggest miner has announced plans to work with a government agency to build crypto mining and AI facilities in BRICS member states.

And Russian regions are also stepping up plans to build crypto mining centers in parts of the country not normally associated with mining.

Tags: