Russian AML Agency Wants to Criminalize Illegal Crypto Mining

The Russian AML agency wants to impose criminal liability on illegal crypto miners operating in the country, claiming that illicit miners are helping launder funds for lawbreakers.

Per the Russian Parliamentary Gazette, the plan is the brainchild of the Federal Financial Monitoring Service (Rosfinmonitoring). The agency is also working on the plan with the Russian Finance Ministry and the Central Bank.

Rosfinmonitoring also wants to hit offenders with administrative liability. German Neglyad, the agency’s Deputy Director, said he told members of the Federation Council about the plans earlier this month. The council is Russia’s upper parliamentary house.

The gazette also said the plan has the backing of the Russian Civic Chamber, one of the nation’s top policy-forming bodies.

Nikolai Zhuravlev, the Federation Council’s Deputy Speaker, said that lawmakers needed to “stay ahead of the curve” if they want to “effectively eliminate the vulnerabilities of the modern financial system.”

The Deputy Director of the Department of Financial Policy at the Ministry of Finance, Osman Kabaloev, has also said that legal amendments “are already being prepared.”

Kabaloev said that the new legislation would help widen the range of punishments courts can hand out to illegal miners.

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At present, crypto mining is only illegal in nine Russian and Russian-controlled regions during the winter months.

In the southern part of the Bitcoin mining hub of Irkutsk Oblast, a year-round ban is in place until 2031. However, crypto mining in these areas is not yet punishable under the terms of the Russian criminal code.

Instead, police can only charge illegal or quasi-legal miners with electricity theft or the improper use of subsidized power.

This means, in most instances, courts do not have enough power to deliver jail terms or hefty fines.

In some cases, illegal miners have simply been ordered to pay back the cost of the electricity they have “stolen” from local grids, in addition to legal costs.

In the rest of the nation, Russians are free to mine crypto at home, so long as they do not use more than 6,000 kWh of energy per month.

Any individual or firm using more than this amount must sign up to a national register managed by the Federal Tax Service.

Rosfinmonitoring said that the new legislation would establish liability for those who fail to comply “with the established requirements for the circulation of cryptoassets.”

The agency added that the new rules would cover “both administrative and criminal liability, differentiated depending on the severity of the crime.”

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The Ministry of Energy earlier this month said that it was considering extending its bans to three more regions.

Media reports claim that mining bans could be forthcoming in northern Karelia, the Penza Oblast, and some parts of Khakassia.

The ministry is likely to make a final decision on the matter sometime in May, officials have confirmed.

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The popularity of Bitcoin, Ethereum, and altcoin mining is continuing to grow in Russia. Some have attributed this to recent rises in global BTC prices.

In January, a top mining expert claimed that the demand for crypto mining rigs and services had increased x3 since the final quarter of FY2023.

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