Russian MoF Finalizes Crypto Regulation Bill To Tame Crypto Mining

Key Insights:

• Ministry of Finance’s (MoF) draft law of the crypto bill “On Digital Currency” highlights the regulations for mining and trading.
• Exchange and digital trading platforms’ operators’ activities will be licensed and controlled by a Russian government body.
• The new law comes soon after the growing demand for mining from Russian ministers themselves.

According to the information released by Russian news agency Kommersant, Russia’s new crypto regulation bill will be strict in its approach.

The draft law’s most recent version describes the new rules of trade and mining of cryptocurrencies (Bitcoin, Ethereum, Litecoin, etc.) established under the bill “On Digital Currency”.

Russia Creates New Crypto Bill

One of the highlights of the bill was the new requirements established for the exchange and digital trading platforms’ operators. As stated by Kommersant, these operators will now be functioning as a team.

The exchange operators will be the ones to carry out the purchase and sale of cryptocurrencies on their own behalf and expense, while the digital trading platform operators will be conducting the organized bidding.

Furthermore, these operators will also be required to create a separate structural unit, prepare annual reports, additional management bodies requirements, internal control and audit requirements, and more.

To add to this, they will also be needed to be defined as an AML/CFT entity, and their activities will be licensed and controlled by a Russian government body.

Lastly, for the first time, the bill will also be focusing on the process and entities behind crypto mining. The bill stated that post-registration with concerned authorities, legal entities, and individual miners could carry out crypto mining.

The taxation for these activities will be defined separately, and if the owner is a Russian legal entity, data centers will also be provided for mining.

Demand for Mining

While the Russian ministry was preparing itself for accepting crypto around January, things began speeding up ever since the war between Russia and Ukraine broke out. Demand for cryptocurrency was rising as it is, but demand for mining increased as well. 

As reported by FXEmpire, Russia’s Deputy Energy Minister, Evgeny Grabchak, stated that the legal vacuum around crypto mining must be eliminated as soon as possible, and a clear set of rules and regulations for this field must be established.

He also suggested decentralizing the process by determining mining sites on a more regional level instead of federal to make it efficient.

Thus, with these regulations looking to come into effect sometime in the future, it seems like the journey from the call for a mining ban to acceptance of regulations is more like a need of the hour than a natural change of opinion.