Crypto miners in Russia must report their earnings under a new law or face jail time and possibly even forced labor. At the same time, the country has subsidized a mining facility in Siberia.
In addition to imprisonment, possibly also forced labour
Reportedly, the length of the prison sentence for any offense has been set at a maximum of 4 years. Crypto miners in Russia must not only declare their income, but also provide information about the transactions, such as the wallet addresses. The exact penalty for non-compliance with these obligations may vary, depending, among other things, on the amount of income earned.
If crypto miners in Russia evade an income statement of about $200,000 twice within three years, they risk a two-year prison sentence and hard labor for the same period. For those who have earned more than $600,000, the penalty is four years in prison and hard labor of the same duration.
In addition to these regulations, a regulatory framework for the cryptocurrency asset class is also expected soon, with Russia setting up a registry of cryptocurrency exchanges. Crypto entities that fail to comply with the framework can face a maximum prison sentence of seven years.
There was also a change in the law regarding money laundering requiring crypto miners to provide information about those involved in the process and other operational information.
Mining should provide relief for Russian economy
While Russia has long tried to curb the growth of the mining industry, it has also made some concessions in recent months. The government is now offering tax breaks for those interested in crypto mining and has helped open a $12 million crypto mining facility in Siberia.
This mining center will have 30,000 mining installations with a total capacity of 100 MegaWatt and should be operational in the first half of 2023. The Russian economy has been badly damaged by economic sanctions and the mining facility should provide some relief. Finally, a state-run crypto exchange is also being launched to increase tax revenue. It is not yet known what the (financial) result of this will be.