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- Russia’s AML agency aims to make illegal crypto mining a criminal offense.
- The proposal has received full support from major state institutions.
- New mining bans may soon be added in three more Russian regions.
Russia’s Federal Financial Monitoring Service, known as Rosfinmonitoring, is moving to classify illegal crypto mining as a crime. The agency says unauthorized miners help criminals launder money.
Rosfinmonitoring now seeks more powerful tools to confront the issue. It is supported by the Finance Ministry, the Central Bank, and the Citizens’ Chamber of Commerce. Illegal cryptocurrency mining is expanding in Russia.
The practice usually goes unobserved or is dealt with lightly by local courts. Police can only file a case of power theft and/or abuse of government-subsidized electricity.
Sentencing to jail is unusual. Offenders typically only repay the energy stolen expenses. Rosfinmonitoring feels that is not enough. The agency proposes that courts be empowered with greater authority to issue longer sentences.
Finance Ministry Proposes Legal Changes
The Ministry of Finance has started work to amend current laws. This will ease the imposition of criminal punishments by judges. Osman Kabaloev, a high-ranking ministry official, stated that under the new law, judges will be able to select punishments depending on the severity of the crime.
Russia’s upper chamber of parliament, the Federation Council, has previously heard these propositions. Officials insist that they need to move swiftly in order to remain ahead of emerging threats in the financial system. Lawmakers feel that the existing rules contain loopholes that illegal miners can use to their advantage. Russia aims to do away with those loopholes by introducing criminal charges in the law.
The laws will specifically target those that do not register and ignore the country’s energy constraints if passed. These regulations will also be applied to those who fail to comply with crypto-related finance regulations. Penalties may vary from administrative penalties to complete criminal prosecutions based on the scope of the crime.
Crypto Mining Interest Grows Across Russia
Nine regions in Russia prohibit mining during winter at present. These prohibitions are in place to avoid overexploitation of the local power supplies. There is a round-the-year prohibition in place in the mining region of Irkutsk Oblast that will run through 2031. Mining here is not illegal, nevertheless.
New regulation will put that on hold. The Ministry of Energy is mulling fresh bans in three regions. These are Karelia, Penza Oblast, and regions of Khakassia. Officials expect a decision in May. Interest in crypto mining is growing throughout Russia.
Increasing Bitcoin and Ethereum prices draw in more miners. Mining equipment demand increased threefold towards the end of 2023. Activity increases and so does the demand for regulation of the industry. Rosfinmonitoring is of the opinion that new legislation will impose order upon a rapidly changing market.
Related Reading: “Bitcoin and Ethereum Lead $3.4 Billion Crypto Investment Surge: Weekly Record Update”
