Russia's Justice Ministry has proposed criminal penalties including five-year prison sentences for illegal cryptocurrency mining.
The draft legislation introduces Article 171.6 to the Criminal Code targeting miners operating outside the Federal Tax Service registry.
Penalties escalate based on income thresholds and organizational structure of operations.
Individual violators generating over 3.5 million rubles ($35,000) face fines up to 1.5 million rubles or two years forced labor.
What Happened
The Ministry of Justice published draft amendments on Russia's official legal portal targeting implementation in 2026.
Operations involving organized groups or income exceeding 13.5 million rubles ($136,000) face fines of 500,000 to 2.5 million rubles.
Maximum sentences include five years imprisonment plus additional fines up to 400,000 rubles.
Russia legalized cryptocurrency mining on November 1, 2024, requiring registration with the Federal Tax Service.
Over 1,000 entities have registered as of May 2025, but compliance remains low.
Deputy Prime Minister Alexander Novak confirmed plans to introduce criminal liability in December 2025.
Illegal miners in Ingushetia stole 35.4 million kWh worth $4.3 million during the first half of 2025.
This accounted for 94% of all unaccounted electricity consumption in the republic.
Total mining farms in Russia grew to 196,900 in 2025, up 44% from 136,600 at end-2024.
Read also: KuCoin Reports 55% Trading Volume Growth Despite $300M US Penalty And Canadian Fine
Why It Matters
Russia controls over 16% of global Bitcoin hashrate, making it the world's second-largest mining hub.
The enforcement push targets both electricity theft and tax revenue capture as the sector gains economic significance.
Senior Kremlin official Maxim Oreshkin has argued mining should be classified as export activity.
Central Bank Governor Elvira Nabiullina acknowledged mining contributes to the ruble's strength.
Corporate miners pay 25% tax rates while individuals face 13-22% progressive rates.
Household miners consuming under 6,000 kWh monthly remain exempt from registration requirements.
The proposed penalties represent Moscow's attempt to formalize the sector while preventing grid damage from illegal operations.
Read next: [Nasdaq-Listed Cypherpunk Buys $29M In Zcash As Hayes Predicts $1,000 Target](Nasdaq-Listed Cypherpunk Buys $29M In Zcash As Hayes Predicts $1,000 Target)