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The Russian Ministry of Finance has rolled out a draft amendment proposing a 15% tax on crypto gains, marking another step in the government’s quest to tame the digital wild west. Announced on Monday, the measure is part of a broader push to regulate crypto mining and transactions—because even in Mother Russia, the taxman cometh.

According to Interfax, the changes aim to overhaul the tax framework for crypto miners, impacting revenues, expenses, and infrastructure. Looks like those mining rigs are going to work a little harder to keep up with the Kremlin’s demands!

Russia’s New Crypto Tax Structure: From Roubles to Revenues

A key piece of the legislation is the 15% personal income tax on crypto gains, signaling Russia’s move to formally integrate crypto into its taxation system.

For miners, income from mined tokens will be taxed at market value upon receipt. On the bright side, operational expenses can be deducted—so you can still write off all those fancy GPUs and sky-high electricity bills. It’s not all bad news, but let’s face it: the Kremlin’s keeping a close eye on your crypto wallet.

Because in Russia, it’s not just “hodl or sell” anymore—it’s “hodl, sell, and pay up.” 💰🐻💻

🚨JUST IN: 🇷🇺Russia Imposes 15% Tax on Bitcoin Mining and crypto income Profits. pic.twitter.com/CjyNpb2igw

— Coinwaft (@coinwaft) November 18, 2024

Under proposed amendments, cryptocurrencies will be classified as property for tax purposes, while crypto transactions will get a little tax relief with the removal of VAT. But don’t get too excited—income from these transactions will now face taxation similar to securities trading.

Crypto miners aren’t off the hook either. Mining operators will be required to notify tax authorities about individuals using their facilities, although details about what data must be disclosed remain fuzzy. Clearly, Russia is turning up the heat to bring transparency and control to its crypto mining sector.

Russia’s Regulatory Pivot: From Wild West to Tamed Territory

As Russia sharpens its regulatory toolkit, the Federal Tax Service (FNS) has floated the idea of taxing unrealized gains for crypto miners. Yes, you read that right—miners might soon pay taxes on coins they haven’t even sold yet.

The FNS is also working on a two-tier tax system that could further complicate mining operations. Industrial miners will have to register with the agency, while small-scale domestic miners get a pass—provided they don’t exceed energy consumption limits.

On October 28, President Vladimir Putin signed a law transferring oversight of the local crypto mining registry to the FNS. Meanwhile, the banking sector is adjusting to the evolving digital currency landscape.

On November 15, Russia’s banking giant Sberbank announced plans for a pilot program focused on crypto-based settlements. This initiative is part of Russia’s broader strategy, which includes an ongoing digital ruble pilot and discussions about stablecoin issuance.

Russia’s latest moves show it’s serious about integrating digital currencies into its national financial infrastructure. Between taxing unrealized gains and piloting crypto settlements, it seems Russia is going all-in on a centralized crypto revolution—because why just mine Bitcoin when you can mine data, taxes, and control too? 🪙🇷🇺💻

Russia Cracks Down on Crypto Mining Amid Electricity Concerns

In addition to tax changes, Russia is tightening regulations on cryptocurrency mining due to electricity shortages. Starting November 1, only registered entrepreneurs and organizations are allowed to mine crypto.

For everyday individuals, mining Bitcoin is still possible, but there’s a catch: they face a strict monthly electricity consumption cap of 6,000 kWh.

Russia Introduced Bitcoin Mining Bans Across The Nation

Starting Dec 2024, Russia’s Energy Ministry is clamping down on mining rigs in energy-stressed zones like Irkutsk, Chechnya, and DPR.

Reason? Subsidized power + limited juice = a tightrope of priorities.

The takeaway’s… pic.twitter.com/gSGLA5FIc6

— Mario Nawfal’s Roundtable (@RoundtableSpace) November 17, 2024

Looks like Russia is saying, “Mine all you want—just don’t blow a fuse!” While the pros suit up to meet these new rules, hobbyist miners might be left wondering if they’ll need to choose between mining Bitcoin or keeping their lights on. 💡💻🐻

Starting December 1, 2024, Russia will implement temporary bans on cryptocurrency mining in certain regions to mitigate the country’s electricity deficit. These restrictions will last until March 15, 2025, targeting areas hit hardest by power shortages.

Dagestan Calls for a Full Mining Ban

Meanwhile, the Republic of Dagestan is taking things a step further, requesting federal approval to ban crypto mining entirely under Russia’s new regulations.

According to MKRU, Sergey Melikov, Head of the Republic of Dagestan, has formally appealed to federal authorities, echoing his plea in a Telegram post from the regional government office. Melikov called for a halt to mining activities in Dagestan until the region’s power grid stabilizes.

Local officials highlighted a sharp rise in energy consumption in recent years, with crypto mining becoming a significant strain on the grid.

“The rapid and uncontrolled development of cryptocurrency mining in Dagestan has become a negative factor. Mining farms exacerbate electricity shortages, affecting the quality and reliability of power supply for Dagestan-based consumers,” stated the office.

The government also noted that the increased load has been a “stress test” for the aging regional power grid, whose wear and tear exceeds national averages.

The result? Frequent blackouts in Dagestani homes, leaving residents quite literally in the dark.

Russia has issued limits on exports of nuclear reactor fuel to the US in retaliation for the US ban on imports.

Matters because the US ban allowed utilities and others to get waivers to continue importing enriched uranium. https://t.co/BaIhG8flnN

— Ari Natter (@AriNatter) November 15, 2024

Between Russia’s mining freeze and Dagestan’s push for a total ban, it seems crypto miners in the region might need to consider alternative locations—or invest in a lot of candles. 🕯️💻⚡

Central Government to Review Dagestan’s Mining Ban Request

Melikov’s office noted that a ban on crypto mining in Dagestan would require a “special decision” from the central government. Moscow has been asked to consider the unique challenges of the region, where the local power grid struggles to keep up with demand.

The regional leader wants crypto mining activities halted in Dagestan until the republic’s energy infrastructure is upgraded. A swift response is likely, as the Ministry of Energy is preparing to issue regional bans on cryptocurrency mining—and Dagestan is expected to be high on the list.

Russia stopped Gazprom gas deliveries to Austria’s biggest energy supplier https://t.co/GxVcQZG2fa pic.twitter.com/MSlxq5FDy7

— Reuters (@Reuters) November 16, 2024

Dagestan’s “Accelerated Development” and Energy Challenges

Melikov attributed Dagestan’s increased energy consumption to “a growing economy” fueled by investment projects, construction, agricultural production, and other factors. While his statement might double as a self-promotion, the numbers don’t lie: electricity consumption in the republic has risen nearly 8%, and over the past three years, it has surged by approximately 26%.

Energy usage typically spikes during the winter months, which raises concerns as temperatures begin to drop.

Dagestan is collaborating with Rosseti, a Russian energy company, to enhance the region’s power grid reliability. However, local authorities admit that these measures aren’t enough to fully support the republic’s rapid development.

Between soaring energy demand, aging infrastructure, and the need for “special decisions,” Dagestan seems to be grappling with the perfect storm. But one thing’s clear: if crypto mining is to continue in the region, it might require more power plants—and less propaganda. 💡⚡🐻