Russia creates committee to legalise crypto mining

Andrei Lugovoy - First Deputy Chairman of the Committee on Security and Anti-Corruption - proposed to legalise cryptocurrency mining

A Russian assembly has created a committee charged with drafting up regulations for the crypto mining industry.

The group was formed following a statement by Andrei Lugovoy, the First Deputy of the Representative Committee on Security and Anti-Corruption. Chairman of the ‘duma’ – Vyacheslav Volodin – instructed the legislature to create a group that will address regulatory gaps in the industry.

Lugovoy confirmed that deputies had already written a draft bill which they will introduce in the duma “without fail”, and added that the matter of Bitcoin mining regulation had become unavoidable. They claim miners earn $2 billion per year in the country without paying taxes.

“We have prepared a bill and we will introduce it without fail,” the parliamentarian said.

Lugovoy said that, due to the lack of regulation on the production of cryptocurrency, law enforcement agencies generally fall into a ‘dead end’ since they cannot establish signs of a crime.

Volodin recently said the issue of crypto mining in Russia had become urgent as miners relocate to the country from China. Russia, along with neighboring Kazakhstan, are now both among the top three countries by global hash rate on the Bitcoin network.

Higher electricity tariffs for crypto mining

The head of the duma’s finance committee, Anatoly Aksakov, said that although crypto mining was not banned in Russia, the rules around taxation were unclear.

He commented that it was necessary to assign a classifying number to the industry and determine procedures for taxation. He also suggested the possibility of charging miners higher electricity tariffs.

The Irkutsk region is already a local Bitcoin mining hub, owing to its cheap retail electricity supply.

Energy-rich Kazakhstan – normally abundant with electricity – began facing a shortage amid a sharp increase in the number of cryptocurrency miners operating in the country. Officials are now looking to import electricity from neighbouring Russia.

Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.

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