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On November 18, a bill (No. 237585-8) regulating the mining and subsequent sale of cryptocurrency in Russia was submitted to the State Duma. The bill, authored by a group of lawmakers including Duma Financial Market Committee Chairman Anatoly Aksakov and Deputy Speaker Alexei Gordeyev, was initially set to go into effect on January 1, 2023. However, the bill has since faced delays and is now set to be reviewed in the spring of 2023.
What Does the Russia Crypto Mining Bill Do?
The Russia Crypto Mining Bill defines “digital currency mining” as the process of conducting mathematical calculations using computing devices and software and hardware to make entries in an information system that uses distributed ledger technology in order to create a digital currency and/or receive remuneration in digital currency. The bill also introduces the concept of mining pools and outlines the mechanisms for selling mined currency by miners. Under the bill, requirements for the activities of individuals and legal entities that conduct digital currency mining, including participants of mining pools, will be established by the Russian government in coordination with the Central Bank. Control and oversight of compliance with these requirements will be carried out by a federal government body authorized by the Russian government.
Selling Mined Currency
One of the main points of contention in the Russia Crypto Mining Bill is the mechanism for selling mined currency. Currently, settlements in cryptocurrency are prohibited in Russia. However, the bill allows miners to sell their mined currency on foreign platforms or through a platform created in Russia under an experimental legal regime. In both cases, transactions must be reported to the Federal Tax Service. The bill also states that if digital currency is sold on foreign platforms, this activity is not subject to the law on currency control and currency regulation. This gives crypto miners the option to sell their cryptocurrency either through foreign systems without having to comply with currency regulation laws, or through a platform in Russia under the experimental legal regime.
Advertising and Offering Digital Currencies
The Russia Crypto Mining Bill also introduces a ban on advertising and offering digital currencies in any form, with the exception of digital currency mining. This means that while miners are able to advertise and offer their services, it is still illegal for other individuals or companies to advertise or offer digital currencies.
What Does the Delay Mean for Miners?
The delay of the Russia Crypto Mining Bill means that miners will have to wait longer to learn about the specific requirements and regulations they will need to follow in order to legally conduct their activities. It also means that the legal risks associated with crypto mining will continue until the bill is passed and implemented.
Despite the delay, the bill has the potential to provide clarity and legal protection for crypto miners in Russia. By establishing certain requirements and allowing miners to sell their cryptocurrency through regulated channels, the bill could help eliminate legal risks and encourage the declaration of earned income and payment of appropriate taxes.
The delay of the Russia Crypto Mining Bill is a setback for miners in the country, but it also provides more time for the government and industry stakeholders to work together and develop clear and effective regulations for the crypto mining industry.
