Russia is planning to increase oversight over the country’s crypto mining industry to improve government control over the crypto mining ban in certain areas. The Ministry of Energy is considering establishing a formal, mandatory registry to identify cryptocurrency mining equipment and maintain a single crypto mining equipment. The initiative could prevent excessive electricity needed to promote crypto mining operations while limiting these activities in areas prohibited by the government.
Russian state-owned publication Tass reported earlier this week that the initiative was proposed by Deputy Energy Minister Yevgeny Grabchak. “The basic task is to optimize the mechanisms for identifying mining activities. It is important to adapt to the law to develop clearer standards to categorize activities specifically for the production of digital currencies,” the Russian Ministry of Energy said in the report.
Meanwhile, the Russian Federation Tax Services (FNS) also claimed that Russian taxpayers involved in crypto mining operations can now announce their cryptocurrency gains through their personal accounts.
Crypto mining is the generation of new tokens for new cryptocurrencies by solving complex proof-of-work (POW) algorithms on advanced computers. The process of massive energy consumption is notorious, and it destroys power to areas where crypto assets are mined.
Russia has determined the increase in cryptocurrency mining activity in 2022. At the time, Grabchak called for the elimination of the legal vacuum to regulate activities. In 2023, Russia will become the world’s second largest crypto mining area, second only to the United States.
The country has banned crypto mining activities in certain areas, including Dagstein, Ingushetia, Kabardino-Balkaria and Karachay-Cherkessia among others. The ban will be launched on January 1 and will be extended until March 15, 2031. According to the ministry’s observations, even in these areas, the “gray mines” have not been unemployed. In grey mining, crypto miners set up their systems at home and in garages to continue mining.
According to the TAS report, Nikolai Shulginov, chairman of the State Duma Energy Commission, believes that the ban may not solve the main problems and may still retain the gray mining plan.
