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Russia will start jailing crypto miners that don’t do this

In this post:

  • In an effort to reduce the amount of tax avoidance being committed by cryptocurrency miners, Russia is strengthening its legislation.
  • Severe punishments, including up to four years in prison, will be imposed on miners who evade income declaration.
  • The Russian government is also cracking down on illicit cryptocurrency activity, and only registered operators will be allowed to exchange digital assets for real money.

Russia’s government is moving to tighten regulations on cryptocurrency miners, forcing them to report income to tax authorities or face up to four years in prison.

The new regulations were announced in February by Deputy Minister Aleksey Moiseev and will require miners to provide information about their digital currency receipts and the unique identifier used to account for digital currency transactions to the tax office.

Russia’s punishment

The Ministry of Finance proposes severe punishment for miners who evade declaring digital assets. Amendments to the Criminal Code, developed by the ministry, provide that if a miner evades income declaration at least twice within three years, and we are talking about an amount above 15 million rubles, he faces up to two years in prison, as well as a fine of up to 300 thousand rubles and forced labor for up to two years.

If the amount is more than 45 million, the punishment is tougher: up to four years in prison, a fine of up to two million rubles, forced labor for up to four years.

These amendments to the criminal code are designed to curb tax evasion by cryptocurrency miners. The Ministry of Finance has been trying for several years to coordinate with other authorities ways to take the crypt under control.

In January, Aleksey Moiseev, the departments “stalled again”: they could not agree on the bill on mining, which was submitted to the State Duma in November 2022. “We have disagreements there, now not only with the Central Bank, but also with law enforcement, too,” Moiseev explained.

Crackdown on illicit cryptocurrency activity

The Russian government is also cracking down on illicit cryptocurrency activity, and the new regulations provide for two ways to sell cryptocurrencies in exchange for real money: on foreign crypto exchanges or on a Russian site under an experimental legal regime.

In Russia, there will be a register of operators for the exchange of digital assets, which can be banks and other legal entities. Anything that does not fit into this framework will be recognized as a violation, for which it threatens up to seven years in prison, a fine of up to one million rubles, and forced labor for up to five years.

An amendment to the law on combating money laundering has also been added to the new version of the mining bill, stating that owners of bitcoins and other cryptocurrencies “are obliged to provide the authorized body, upon request, with information about their operations (transactions) with digital currency.”

The State Duma is also considering another bill about the crypt, which provides for amendments to the Tax Code. According to the document, transactions with digital currency in the amount of more than 600 thousand rubles a year will be subject to mandatory tax declaration.

At the same time, the Federal Tax Service will have the right to demand bank statements of individuals’ accounts if transactions are related to the transfer of digital currency, and there are signs of a possible violation of tax laws.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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