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As per the source, at least 600 Russian mining companies and operators have registered with the nation’s Federal Tax Service (FTS) even as it emerges that Russia’s state-owned power grid operator Rosseti Group lost close to $14.2 million to illegal crypto mining companies.
According to an official statement from FTS on the RBC media outlet, the companies that have registered with the tax authorities so far include over 518 miners and at least 91 other operators involved in the crypto mining process, including hosting services and data centers.
Miners to Start Paying Levies
To nab those involved in illegal crypto mining, the Russian government asked all crypto mining firms and individuals consuming over 6,000 kWh of electricity monthly to register with the tax authorities. There is currently every reason to believe that Moscow is in the process of implementing a bill that would see all those involved begin paying levies on their income.
However, the recent report by the Rosseti Group suggests that the challenges caused by illegal crypto-mining activities were eating into the revenue of the government-owned power grid company. According to the firm, the government firm lost over $14.2 million due to the activities of illegal crypto-mining operators, locally known as black mining firms. The government’s news agency TASS reported widespread damages across the firm’s electrical networks.
40 Criminal Cases Initiated
According to the report, the North Caucus region faced the most significant impact, with over 600 million electricity lost to illegal mining. At the same time, the Novosibirsk grid suffered losses of 400 million rubles, followed by the Center and Volga regions, suffering damages amounting to 120 million rubles each. Rossetti Group highlighted the case of an individual operator who allegedly owned at least 3,200 mining devices, illegally drawing industrial-scale electricity and causing the firm losses estimated at $2.2 million.
To deal with the increased cases of illegal crypto mining, Rosseti Group has increased its efforts to identify and shut down the unauthorized mining farms. The company’s reports stated:
“The materials have been transferred to law enforcement agencies. More than 40 criminal cases have been initiated under articles of the Criminal Code of the Russian Federation that provide punishment with a real term of imprisonment.”
Illegal Crypto Mining Causes Serious Problems
Rosseti Group further reported that the firm uncovered over 130 illegal crypto-mining connections and shut them down, leading to over 40 active criminal cases. Besides draining financial resources, the power firm highlighted that the illicit activities also caused serious electrical issues, such as frequent voltage drops that damaged equipment and appliances.
The company gave a notable example where an illegal miner in the Karachay-Cherkessia region with 200 mining systems consumed over 12,000 kWh of electricity, leading to power disruptions and numerous complaints from residents.
Conclusion
As mining operators’ register to be included in the tax register continues, Rosseti Group calls for more robust enforcement and stricter regulatory oversight to deter illegal crypto mining activities. The inclusion in the tax registers and reporting on their activities aim to allow miners to conduct their activities safely while paying levies on their earnings.
Frequently Asked Questions (FAQs)
Has Russia banned crypto mining?
Due to energy consumption demands, the Russian government banned crypto mining in 10 regions until March 2031.
In what regions does Russia restrict crypt mining?
Russia has banned cryptocurrency mining in several Siberian regions and annexed areas of Ukraine to prevent winter power shortages.
What is the most popular cryptocurrency mined in Russia?
Search interest for Bitcoin accounted for approximately 62 percent of the total search volume for cryptocurrencies in Russia.
How many crypto users are in Russia?
Statistics show that it is expected to reach 24.59m users by 2025. The user penetration rate, which measures the percentage of the population using cryptocurrencies, is projected to be 17.13% in 2025.
Appendix: Glossary to Key Terms
Crypto: Any form of currency that exists digitally or virtually and uses cryptography to secure transactions.
Bitcoin: A cryptocurrency (a virtual currency) designed to act as money and a form of payment outside the control of any one person, group, or entity
Crypto mining: Verifying and adding transactions to a blockchain to earn digital currency as a reward for using computational resources.
