Russia Targets Two More Regions for Permanent Crypto Mining Ban

TLDR

• Russia plans to ban crypto mining year-round in Buryatia and Zabaykalsky Krai due to electricity shortages.
• The Ministry of Energy announced the potential permanent restrictions during a Federation Council meeting this week.
• Both regions currently face seasonal crypto mining bans, which only apply during the fall and winter months when energy demand peaks.
• The territories share power distribution networks with Irkutsk Oblast, where crypto mining is banned until 2031.
• Russia legalized cryptocurrency mining in 2024, but rapid industry growth led to widespread power deficits across multiple regions.

Russia’s federal government plans to impose permanent bans on crypto mining in two Siberian territories. The Republic of Buryatia and Zabaykalsky Krai currently face seasonal restrictions during the winter months. Moscow authorities cite electricity shortages as the primary reason for extending these limitations.

Energy Ministry Proposes Full-Year Restrictions

The Ministry of Energy announced the potential year-round ban during a meeting of the Federation Council. Olga Arutyunova serves as Deputy Director of the Ministry’s Department for Development. She confirmed officials monitor the situation closely in both regions.

The current seasonal restrictions apply only during fall and winter months when energy demand peaks. These territories share power generation networks with Irkutsk Oblast, where crypto mining faces complete restrictions.

Irkutsk Oblast banned crypto mining operations until spring 2031 across its southern areas. The three administrative units function as one interconnected power distribution system. Authorities can therefore implement coordinated measures to control electricity consumption.

Legalization Creates Infrastructure Challenges

Russia legalized crypto mining in 2024 to capitalize on its abundant energy resources. The country offers competitive advantages through cool climates and vast power generation capacity. Corporate entities and individual entrepreneurs can participate after registering with the Federal Tax Service.

Registered miners must declare their hardware specifications to tax authorities. They must pay the required taxes to the state on all crypto mining revenue. The registration system aims to bring underground operations into the regulated economy.

However, the expansion of crypto mining has caused widespread power deficits in multiple Russian regions. Mining enterprises are concentrated in areas with low electricity rates and subsidized power costs. The rapid growth led to frequent grid breakdowns and infrastructure failures.

Local authorities imposed restrictions in approximately twelve Russian regions to address these problems. Some implemented temporary measures while others established permanent bans on crypto mining operations. The federal government approved all regional restrictions on mining activities.

Russia Allows Remote Disconnection of Crypto Mining Operations

Anton Gorelkin chairs the State Duma’s Committee on Information Policy and Technologies. He addressed crypto mining reputation issues at a digital law forum this week. The industry struggles with negative public perception despite recent legalization efforts.

He emphasized miners themselves must prove their value to Russia’s economy. The burden of demonstrating economic benefits falls on crypto mining companies.

Energy Minister Sergey Tsivilyov proposed legislative amendments in July regarding power allocation. The changes would allow other organizations to use generation capacities occupied by crypto mining companies. His department received orders to draft regulations classifying crypto farms as low-priority consumers.

These regulations permit remote disconnection of crypto mining operations during power shortages. Distribution networks can cut off mining facilities whenever electricity demand exceeds supply. Legitimate businesses complain that sudden regulatory changes force expensive equipment relocations across Russia.

Remote Regions See Economic Opportunities

Aisen Nikolayev leads the State Council’s energy commission and governs Yakutia Republic. He argues crypto mining benefits remote regions with abundant local energy resources. Areas lacking export infrastructure can utilize otherwise stranded energy assets.

The Republic of Sakha in Russia‘s Far East exemplifies this model well. Local coal and gas reserves can power energy-intensive crypto mining and data centers.

Such operations help develop regional economies in isolated territories throughout Russia. Transportation costs make exporting these energy resources impractical for many remote locations. Converting local fuel into computational power creates economic value from stranded assets.

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