The Russian AML agency is taking a firm stance against illegal crypto mining in the country, with plans to impose criminal liability on offenders. The Federal Financial Monitoring Service (Rosfinmonitoring) is leading the charge on this initiative, working in collaboration with the Russian Finance Ministry and the Central Bank.
According to reports from the Russian Parliamentary Gazette, Rosfinmonitoring aims to crack down on illicit miners who are allegedly aiding in money laundering activities for criminals. The agency also intends to introduce administrative liability measures for offenders. German Neglyad, the Deputy Director of Rosfinmonitoring, recently presented these plans to members of the Federation Council, Russia’s upper parliamentary house.
The proposal has garnered support from the Russian Civic Chamber, a prominent policy-forming body in the country. Nikolai Zhuravlev, the Deputy Speaker of the Federation Council, emphasized the importance of proactively addressing vulnerabilities in the financial system to combat illicit activities effectively.
Osman Kabaloev, the Deputy Director of the Department of Financial Policy at the Ministry of Finance, revealed that legal amendments are already in progress to enhance the punishment framework for illegal miners. The forthcoming legislation aims to broaden the scope of penalties that courts can impose on offenders engaged in unauthorized mining activities.
Currently, crypto mining is only prohibited in nine regions of Russia during specific periods, primarily in the winter months. In these areas, unauthorized miners may face charges related to electricity theft or misuse of subsidized power, rather than criminal penalties. However, authorities are limited in their ability to impose significant fines or imprisonment in such cases.
In the rest of the country, individuals and businesses are permitted to engage in crypto mining as long as they adhere to energy consumption limits and register with the Federal Tax Service if exceeding specified thresholds. Rosfinmonitoring intends to introduce new legislation that will establish accountability for non-compliance with regulations governing the circulation of crypto assets. The proposed rules will encompass both administrative and criminal liabilities based on the severity of the offense.
The Ministry of Energy is also considering extending mining bans to additional regions, including northern Karelia, Penza Oblast, and parts of Khakassia. The final decision on these potential prohibitions is expected in May, as authorities continue to monitor and regulate the growing popularity of cryptocurrency mining in Russia.
Despite regulatory challenges, the demand for crypto mining services remains strong, fueled by rising global prices of cryptocurrencies like Bitcoin and Ethereum. Industry experts have noted a significant uptick in demand for mining rigs and services, underscoring the ongoing appeal of crypto mining in the country.
As Russia takes steps to combat illegal crypto mining activities, the industry landscape continues to evolve, prompting the need for robust regulatory measures to safeguard the integrity of the financial system. The proposed crackdown on illicit miners reflects the government’s commitment to addressing money laundering risks associated with unauthorized crypto mining operations.