Crypto Revolution: Russian Mining Firms Embrace Legitimacy Amid Explosive Growth

As stated by a senior Moscow legislator, the number of officially recognized cryptocurrency mining enterprises surged from merely 91 at the beginning of 2024 to more than 1,000 today.

This significant increase follows a law enacted in the fall of 2024 mandating that anyone utilizing over 6,000 kWh of electricity each month must register with the Federal Tax Service (FTS).

According to information from the Russian publication RBC, members of parliament claim that “white” miners now significantly outnumber their unregistered equivalents.

Surge In Registered Mining Companies

The new registry compels companies to disclose the quantity of coins they extract as well as the wallets where those holdings are stored. It also facilitates the FTS in collecting taxes on mining earnings.

Industry estimates suggest this could enhance state revenues by as much as $500 million annually. This projection arises from Russia’s mining leaders, who have been advocating strongly for clear regulations rather than outright prohibitions.

Initial Grid Overloads Trouble Miners

Prior to the registration requirement, numerous operators concealed their equipment. They aimed to avoid fines or shutdowns.

Consequently, some cities and regions experienced sudden power outages when large mining installations consumed more electricity than local grids could manage.

Alexey Nechaev, leader of the New People Party, informed lawmakers on July 23 that those challenges are quickly becoming a thing of the past.

Expanding Investments Beyond Mining

Industrial miners are not limiting themselves to ASICs. They invested over $60 million into artificial intelligence initiatives this year, Nechaev mentioned.

According to FTS data, this transition indicates that more technology funding remains in Russia rather than being siphoned off. It signifies that serious entities view cryptocurrency as part of a larger toolkit, not merely a separate venture.

Bitcoin Hashrate

The Association of Industrial Miners reports that Russia now possesses over 150 EH/s, or close to 17% of the global Bitcoin hashrate, making it the world’s second largest miner after the US.

Domestic projections estimate the country’s 2024 Bitcoin yield at up to 40,000 BTC—approximately $4.8 billion at current valuations. This quantity emphasizes how swiftly a defined legal framework can stimulate growth.

Lawmakers Consider Asset Seizures To Deter Illicit Mining

In the meantime, a prominent legislator has urged courts to classify coins as “intangible assets” so that authorities can confiscate property from illegal miners.

He contends that integrating cryptocurrency into property legislation would empower the state against unregistered operations. If sanctioned, this could tighten the noose around anyone still attempting to mine in ambiguous areas.

For the time being, Russia’s leaders appear resolute on one point: regulation is preferable to prohibition. By clarifying who is mining where, Moscow aims to maintain its grid stability, ensure balanced tax revenues, and promote growth in its tech sector.

Featured image from Pexels, chart from TradingView

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