Topic: Russia would ban miners from receiving rewards in bitcoins and cryptocurrencies (Read 837 times)

I think that until you have declared income from cryptocurrency and made it clear to the tax authorities that you are generally connected with this, no one will ever get to you until you transfer regular large transactions on bank accounts associated directly with you. Until then, you are invisible and no one will ever knock on your door. As if you had a farm at home and paid for electricity regularly and on time - the same thing, they will never come to you. They come only to those who have high consumption and he does not pay for it.

What are the regions with such opportunities?
When they talk about bribes in Russia, everything has long been legalized.
If you rent space in a shopping center, then you pay the rental amount, which already includes administrative costs. You will also have to sign contracts for security and possibly insurance services. Otherwise, they will not sign a lease with you.
A check comes to you, which monitors compliance with fire safety standards, checks sanitary standards, etc.
They will not extort bribes from you, but they will recommend that you apply for services to a certain company to solve these problems.
If you conclude a government contract, then your customer will ask you to purchase goods from a specific company at specific prices.
The list is endless.

I think that the situation with the raised problems, both with taxes and inspection bodies, is different in different regions of Russia. Somewhere it is perfectly fine to do business and there are no such problems as described above, in other regions the situation may be much worse. I have many friends in different regions of the country and they all faced these problems in one way or another but solved them without bribes. As for the law, I think soon the mining of cryptocurrency by small forces in apartments or houses will be inappropriate both in terms of costs and results. Especially if the price drops.

Business in Russia does not work without bribes. If you have a small store, you will pay fire inspectors, inspectors from the Sanitary and Epidemiological Service, you will give discounts to the local police. If you have a larger business, then you will pay the heads of these organizations.
If you do not do this, then a commission of auditors will come to you, which will close your business.
If you work in a market or a shopping center, then these costs are included in the contract
The further you are from Moscow, the more arbitrariness from local officials.
And taxes are a big and separate topic in Russia. Big business tries to optimize in various legal ways or not entirely legal ones. Small business .. if interested, I will write

In my opinion, it is still everyone's choice of how to behave with the authorities and tax authorities. But obviously it's best to avoid legal problems wherever you work. I would also like to correct the above that the tax systems and corruption in the Russian Federation and Ukraine are comparable. I am sure that this is not so - yes, corruption is a phenomenon that exists in every country - somewhere more, somewhere less, but putting these two countries on the same anti-rating shelf is incorrect, but I could be wrong.

It is amazing the contortions that authoritarian governments will go to in order to ban certain activities without actually banning them. Just so that they can preach in the news "we are open to supporting cryptocurrencies and their development". What they are effectively doing is nationalizing all bitcoin mining operations by preventing miners from earning any profit - which will force them to either abandon the activity (to be replaced by "friends" who get to use the cheap energy) or pay any profits from mining directly to government controlled wallets. As always, it is a rather sly and indirect way of stealing the hard work that enterprising business people in Russia have built up over time in order to help plug the massive holes in GDP. Just because they've seen a massive amount of easy money up for grabs from these in-country cryptocurrency operations. You can bet that any attempts to move the mining equipment out of the country would get stopped at customs and probably charged exorbitant fees or just seized outright.

Zasad wasn't talking about evading taxes. He was talking about paying the bribes along with the taxes. From what I have heard, tax rate in Russia is quite low (10% to 20%). So taking out another 10% to 20% for bribes will still leave you with enough money in your pocket. Obviously it can become a vicious circle. But in countries such as Russia and Ukraine, entrepreneurs have hardly any choice, I believe. Corruption runs deep, involving the most powerful people.

I think that giving bribes and taking such steps just for the sake of tax evasion is wrong and even a little silly. Do not be offended, but it works like this: if you once went to such a dubious deal with the tax or law enforcement agencies, you fell into a vicious circle. Next month, the same people will come to you again and will already demand the same deal from you. (I remind you that this is illegal and the consequence may be criminal prosecution) There is a big doubt that it is justified to take such a risk for the sake of greed.

A friend from the former USSR once told me that only those who are from that region will understand how the things work there. I guess he is right. The former Soviet Union is a world apart and what you said may be right. The tax levels are quite low, from what I have heard. So sharing another 20% of so with some of the corrupt officials won't leave you with a hole in your pocket. But the question is how to identify the "right officials and controllers" as you have stated. Again, being someone who have never travelled to that region, I am at a loss to understand how this works.

Solving problems in court is much more expensive.
Better to work quietly and share with the right officials and controllers. This is how everything works in Russia.
I saw the news when mining plants were confiscated that were illegally connected to power grids. But these are isolated cases.

Although the news is old, I'll tell you what: I personally know many of those people who are engaged in mining and none of them stopped or even thought about the consequences. Considering the price shown by bitcoin, this is not a problem at all. Yes, and I have not seen such court cases - but they would be talked about. So we extract calmly and do not think about the bad. There is not even a legal basis for prosecution, let alone condemnation. So these are all just words without the law, they don't work

May is coming soon, and the declaration of cryptocurrency in Russia is not mandatory for all citizens. With mining on big mining farms, nothing has changed. Meigners pay bribes, so no one checks them.
The situation is positive, you can sell cryptocurrency and declare income at a rate of 4 to 13%, and indicate the type of activity IT services.
But people are in no hurry to declare cryptocurrency, because there are a lot of incomprehensible points in the laws.

The month of March has already come and the topic has not moved off the ground. This means that they decided to drag out the discussion and collect more opinions in the expert community, which in Russia is not very big. This means that the law can still receive a new impulse, be supplemented with new proposals and change in terms of taxes and their values ​​in percent, and so on. There is no need to rush to conclusions, because this is a very important law.

This is the whole point of governments in any country. They try to subjugate, tax, or destroy everything they cannot reach by other means. The process is different in different countries, but sometimes one gets the impression that individual countries are deliberately "shooting themselves in the foot" with stupid restrictive measures, which in the end will only lead to the fact that "digital capital" will simply flow to another country.

I am not arguing with you.
That post about the Irkutsk region, I talked about buying a house for mining as a business.

In this post,, I said that mining as an opportunity for good additional income for Russians. Now in Russia there is a very difficult situation, many people have lost their jobs, so mining for them is the only way to make money.
For $ 10 a day in russia, you can get along.

Seriously, what are you trying to prove here?
Reall, what's your point? What's your aim in this discussion?
Are you just trying to contradict people just for the sake of showing others you know more? Cause you're not really showing it!

Do I have to remind you where the discussion started?

It started here:

I'm dead serious, what's your aim in this discussion, and why are you even arguing with me when you can't remember what you have said few two days ago?

If the equipment is in the house or apartment where you live, then this is home mining. If the equipment is in a different location, then this is not home mining.
In Russia, the average salary in non-large cities is $ 300-400 per month. I will assume that 4-5 video cards allow you to get a monthly salary. Therefore, whoever has video cards will use any opportunity to make money.

The confusion starts from the fact that houses don't have kW connections  
It is either at 110V or 230V and since this is Russia, it's probably 230.

So if your house is on the average flat that all of Eastern Europe has built during the '60-'90 period and in which 70% of the population live, you're most likely to have a 230V connection that goes to a maybe at best 25A-30A breaker, at this means everything over 7000W will leave you in the dark,  and once more I want to bold the part of "home" miner.
Once you start with wiring, special permits, talking to your electric company to modify circuits, that's no longer home mining!

Yes you can enter a better deal, yes you can modify things, but when I entered the discussion this was about home mining, not what you can do if you want to grease your ways into mining.

This kind of business is booming all over the world today and therefore the interest of the inspection authorities has grown again. This is normal. I am sure that most of the community of mining dummies and others did not even pay attention to this news. Why should they now curtail or somehow adapt to the legislation? These laws are often written by people far from the industry and do not understand the essence of their own decisions.

Everything is correct. You can also consume more electricity if you make friends with checking electricians It is beneficial for energy companies to cooperate with such clients, because miners pay for services on time and do not steal electricity. Miners don't need extra checks.
But this business has risks. The enforcement structure can come with a check at any time and seize the equipment if your partners do not agree on the amount of the bribe.
But also your partners can deceive you. They can ask the enforcement structure to seize the equipment and you will lose money, and then they will mine on your equipment yourself.
This is roughly how business works in Russia.

So a house can have a 30 kW connection, that "hour" you added was what caused the confusion. 30 kW * 24 h * 30 d = 21600 kWh. If the cottages are cheap that could make sense, that's 6x S19 Pro per cottage, or about $5k per month at $0.02 / kWh at current price and difficulty levels.

Submitting to your will or taking control of the entire industry in Russia, as in any other country, will completely fail! However, steps to regulate and move the cryptocurrency world out of the gray zone are already a good sign. I think soon many advanced countries that care about the future of their economies will integrate cryptocurrency.

In my region, a private house can consume a maximum of 15 KW
Here is one of the articles that says how to conclude a contract for the supply of electricity to a private house (15 KW).
https://klimatlab.com/elektrosnabzhenie/podklyuchenie-k-elektrosetyam-chastnogo-doma-15-kvt-poshagovaya-instrukciya.html

"To connect 30 kilowatts or more, you need to buy a house in a place where there is no gas or and central heating. Therefore, your heating will be electric. The project also indicates a bath with an electric stove."
I did not study the details, people write that you need to pay 1-2 thousand dollars to a private company and it will draw up the necessary documents in a few months, and then the house will be connected. This is possible only in those regions where there is a huge surplus of produced electricity.
I was offered to invest in such a project.

Once you start thinking of moving to another city buying a plot of land and so on and on that's no longer "home" mining.
I'm not familiar with the stuff there, I only know the western part of Russia but still, that 30kw/h per home is weird, are you sure about it? Because 30KW being continuously drawn from the grid it's no normal house wiring. I see the average house consumption in Russia is 600kwh per month, that limit you're talking about is 720kwh a day.
Of course, it might be possible but I am a bit skeptical.


As I was saying in my first message, that's not home mining. 
Once the gear is out of your house where you sleep it no longer fits that description.

https://cbeci.org/mining_map
Russia ranks third in bitcoin mining in the world. And then there is Ethereum and many other altcoins.
Mining taxes in Russia are still not paid and there is no law on their payment.
In Russia there are tax regimes that allow you to declare income, so the source of income can be indicated in the declaration: IT services.
But most of the income is not declared.

I read the miners forum. In Russia, the cheapest electricity is in the Irkutsk region ($ 0.020).
Every citizen can buy a piece of land to build a house. The maximum consumption limit is 30 Kilowatts / hour per home. You can buy several plots of land. These cottage villages are built specifically for mining, people do not live there and the noise does not bother anyone.
And according to the law, a citizen's home is inviolable.
Miners pay only for light and security

It's not going to last forever, it's a matter of time before miners and many other businesses are forced to pay CO2 taxes, one way or another. Industrial cryptocurrency mining is especially likely to be targeted, and even going abroad might not be enough depending on the negotiated international agreements. That could relegate mining back to homes assuming consumption of electricity generated from renewables would be treated differently.

Home miners as in a guy running his farm in his apartment has been killed by Bitmain and Cannan a long time ago.
The S19pro is doing 3250W and the A12 3420W, with the usual wiring in blocks of flats all over Eastern Europe anything more than one of those on one circuit is going to blow your breaker, the standard all around here for maximum power draw was between 5.5-7.5 kw, in theory, not even talking about the noise those things make.

Maybe new flats that are being built in the last decade have better wiring since more power-hungry electric appliances have become popular like electric ovens, air conditioning but those are just a drop in the ocean and they are not over that limit by much. Besides, you will never be able to compete with a business that can negotiate in terms of MW.

Well, Mother Russia, as always, is in the tail of such events. While all normal countries are occupied with deregulation and opening the market for investment in cryptocurrency and somewhere they even accept payment in supermarkets ... Russia is going through regulation and bans! What news! In the end, we will see how the big pie of the cryptocurrency market will be divided by "smart" countries, and everyone else will be forced to catch up in development. block chain is the future and already the present. It is a pity that not all managers understand this now.

crypto mining is like a job . when you work you expect for a salary but if you are prohibited to recieve your salary why will you still continue working but this dont totally kill the mining industry in that country because they didnt include that creating a miner and selling it for a fiat is illegal .

 is the electricity cheap in russia and they think that russian miners are earning good in mining but if they can reduced the rewards taken by miners and continue allowing the miners to work , that can be a better idea .

Everything that is happening in Russia now can be described in the words of the famous classic writer Fyodor Tyutchev (1866):

"Умoм — Poccию нe пoнять,
Apшинoм oбщим нe измepить.
У нeй ocoбeннaя cтaть —
B Poccию мoжнo тoлькo вepить."
The author of the poem Fedor Tyutchev(C)

There are still many translations into English, because it is very difficult to translate these 4 lines of the poem into other languages:

"You will not grasp her with your mind
Or cover with a common label,
For Russia is one of a kind –
Believe in her, if you are able..."

or

"Russia cannot be understood with the mind alone,
No ordinary yardstick can span her greatness:
She stands alone, unique –
In Russia, one can only believe."

Source:
https://ruthenia.ru/tiutcheviana/publications/trans/umomrossiju.html#en

In order for Russia to become one of the countries actively mentioned in this issue with a positive agenda, a well-thought-out policy in the field of lawmaking is needed. So that all market participants feel comfortable and understand what will happen tomorrow. We must understand that regulation is often carried out by people without the necessary competencies, and therefore instead of unloading the industry, it turns out to be bureaucratized and constrained.

Nothing has changed in Russia regarding cryptocurrencies.
Black markets are open in many major cities, and you can easily exchange cryptocurrency for fiat.
I saw several news reports that miners who were stealing electricity were detained. But on the scale of a huge country, nothing changes.
The controls are tightening, but this is leading to the growth and development of the black market throughout the country.

Not sure whether you read what is published, it says as a miner you wont be allowed take the incentives, basically killing the mining industry running in Russia and there might be reasons regarding power consumption but i does not say anything banning the use of cryptocurrency.
They can restrict the miners but it is impossible to ban trading.

In Russia, there is such contradictory and stupid legislation on cryptocurrency that one involuntarily asks the question: if there are no fools, then why are they doing it. You can have cryptocurrency, but you can't use it. Or Putin is inconvenient to completely prohibit cryptocurrency, after all, he has previously spoken positively about it. I see that if Putin reigns a little more, then cryptocurrency will be practically banned in Russia on pain of criminal liability. So we'll see if the state can control its laws to ban cryptocurrency.

In russia, a large number of industries were destroyed due to a long crisis. Many factories use their mining capabilities. They either lease premises to miners or try to mine cryptocurrency on their own.
Statistics:
https://cbeci.org/mining_map
If you start to fight miners, it will cause great losses to the country's energy enterprises.
Therefore, I think that the government will develop a taxation system for miners. So far I've only read projects.

Yeah i dont see anything way bitcoin miner get banned on rusia and i aggree with you about china since most biggest miner happen in there and also they are bitcoin chip maker right. if i in russia i will start considering cloud mining event this kinda high risk or using PoS algorithm to stake some altcoin right

I think some geo-politics also involve in this, because i heard some news that PM tenure will be finished. That's why he is taking some unpredictable steps against miners. Russia's very friendly country china till now didnot imposed any strong steps against miners. And I dont think in Russia there is lack of power.

Probably Miners should move their operation to the free country. Because in some near future they will definitely take the power-cut steps aganinst them.

People not only become officials in order to take over someone else's business, but also sew up their own or receive bribes.
 Russia offers great opportunities, unlike other countries. If you invest $ 1,000,000 in a business, then in the USA or Europe you will honestly pay taxes and earn 5-10% profit per year.
In Russia, you earn 100% of the annual profit, and if you have the necessary acquaintances, then 50% of the profits will be taken from you, and the rest will remain with you. Even if 80% of your profits are taken away from you, your investment will still be more successful.
If someone thinks that there are stupid laws in Russia, he is wrong. All these laws are being written so that officials, security officials and other controlling organizations have more power over business.

In Germany one Bitcoin ATM operator got rid of competition by encouraging the adoption and enforcement of burdensome regulations. Link. Not that much different, although in Russia everything is always at another level, I heard it's often officials themselves using their powers to take over businesses to enrich themselves.

There are many laws in russia not to make the situation better, but vice versa.
This is a very good way to get rid of competitors and take away their business. If you do not have support in political or security structures, then your business will be quickly closed.

Let me explain with an example. At the beginning of the year, shopping centers began to be checked for anti-terrorist security. The new shopping centers had no problems. And what to do in other cities, where there are many shopping centers built in 1970-1980 and there are a lot of them? They do not meet these standards (it is impossible to increase the width of the corridors, the width of the stairs and other standards).

Business owners paid bribes to obtain permits (falsified attendance figures, changed the type of business activity, and so on)

That is, according to the documents, all centers comply with the new anti-terrorist standards, but in fact nothing has changed. And this is how most of the norms and laws in Russia work.

It will be the same with mining, it will be disguised as data centers and other permitted activities.

According to the documents, there will be no mining in Russia if it is banned, but in fact large miners will ruin the small ones by sending controlling organizations to them.

This is how everything works in Russia.

If they wanted to ban anything to do with them except possessing for current holders, this is what they could do.


Being only allowed to transact using a government wallet (lol) is as dark a scenario as it gets.

If only 1.5% are interested or have used Cryptocurrency why the hassle of implementing and banning miners and users of Cryptocurrency, they are only small community, Russia has a lot of issues they should not bother creating laws banning and spending money prosecuting miners and users of  Cryptocurrency, they have bigger issues like the Corona virus and their economy as well/

I read analytical studies, it also said that in Russia a little more than a million people are interested in cryptocurrencies in detail.
An interested person does not mean someone who uses them.
According to other analytics, there are only 500,000 miners in Russia.
I have been trying for a long time to find out how these studies went, but this tells us that 1.5% of the country's population are interested in or use cryptocurrencies

Maybe 0.7%, that would be far more likely.
How in the name of god would 100 million people (Russia's population is close to 150) be able to use Bitcoin?
Even if only Russians would use BTC  and no other country it will take 7 months for each of them to make one tx.
There are only 23 million addresses in the whole chain with a balance higher of 1$, where would the rest be?

Nope, 70% is completely absurd, 7% is exaggerated, 0.7 which means 1 million is far more likely to be the real thing.


It's not FUD and it's nothing unclear.
There is a proposal waiting in the duma for a vote exactly with the above.
Simple as that.

Let me write you a few facts:
Russian miners are already registering as self-employed citizens and paying taxes.
Here is a fresh video of a famous Russian miner who pays taxes and films it
https://www.youtube.com/watch?v=HVTCAVlrA3c

In Irkutsk and neighboring regions, the cost of electricity is $ 0.011 per kilowatt. Miners consume huge amounts of electricity, and if this business is banned, the economy will suffer huge losses.

If it's even easier to explain, then the prohibition of mining in Russia can be compared to the fact that you shoot your employee in the foot, and then send him to work

The information you provide is misleading, you are not quoting the good side, you are only quoting the bad information.

Try to read here the update on 10 September 2020.
Source: https://bitfinance.news/en/russia-to-ban-miners-from-receiving-crypto-rewards/

You see the black label that's the answer to all of that, the news you give.
OP, currently crypto in Russia looks very good from and miners, investors, investments etc. really enjoy it.

OP, this problem is still the pros and cons, what you need to know in Russia is that 70% of the people use digital / crypto currencies like Bitcoin, the rest don't know about crypto.

So, stop spreading unclear news, in the future if there is news about crypto in Russia, wait for an official decision from the government, then the OP will bring it to this Forum.

The communist dream. I don't know how the Russian government would do this exactly, but the intent is clear: they want the miner's money on the miners' own expense, and it's straight-up robbery made legal on the government terms. I doubt that some serious Russian miners would still stick into hashing on the said country. They'll move into other places right before this reform is passed on the law legalizing mining operations and the Russian government effectively shot themselves on their knees.

They could have just asked nicely, I mean, in the form of taxation without that aggressive wording. Stating threats almost immediately to get what you need does not work 100% of the time.

It makes no sense for them to let mining but prohibit miners from getting reward. All they are looking for is a way to get the cut out of miners profit. They haven't decided how and how large the cut would be. Crypto mining has became a lucrative industry in Russia. With cheap gas electricity from siberia, bitcoin could be a way for them to gain international reserves on current embargo situation.

I find this really weird. How in the world did the country's ministry of finance came up with these three uses? I am a bit interested to know the process or study by which they determined that Bitcoin and crypto transactions are best limited to these areas. I bet this is another case of implementing Bitcoin and crypto-related policies without understanding Bitcoin and crypto first. 


Petro was dead right from the start so I guess there is no such thing as Russia supporting, much less promoting, Petro.

This whole situation sounds really messy. I wonder if that is happening out of malice (ie. trying to get rid of cryptocurrencies) or incompentence (ie. trying to regulate cryptocurrencies).

Either way it looks like Russia plans on falling even further behind, economically.



I wasn't aware of the alleged ties between the Petro and Russia until now, interesting to learn. It's even more interesting to hear that it's still being pushed. A cryptocurrency issued by Venezuela, backed by oil, sounds like it should be long dead by now.

I highly doubt that usage when the coin has 300 transactions a day
https://explorador.petro.gob.ve/insight
and almost all of them are generated by a few addresses:
https://explorador.petro.gob.ve/insight/address/PPHjLphDotbMey3NrxTyW7hsRHiT7jzJbh


Of course, what you say makes sense also, but in theory...
If you were a small miner, thus making 300-400 $ maximum a month, that after electricity costs would mean at least two s19pro, would you risk for those seven years in prison?
When you're far away it's easy to say, they will not catch me, but would still sleep comfortably at night knowing what your risk once caught?
As for coercion, remember who we're talking about, a government that has no problem making people drink flavored tea, committing suicide by jumping from the 8th floor of a two stories high building, and many more like this. Would you keep on mining if you see news about this every day for a week on national tv?

No, if they want to annihilate home mining, they can, this is not a free country we're talking where you can sue or protest against the government, but as I said before I think they voted something just for the sake of voting, it's not the first time they have no clue what law they've just passed.
I'm sure that once they realize they will either amend it or drop it altogether, or make it that only one branch of the police can act on it and that branch will never take action.

Well from my point of view if the government of Russia reaches an agreement as it says in the post, possibly this is to promote more PETRO since we know that it is a cryptocurrency that the government of Russia and Venezuela is promoting and in places like vk (the Russian facebook) is used, but hey how it is a cryptocurrency "backed by oil" I doubt that people have much confidence since we all know the decline that all stocks related to a barrel of oil had in futures

If it all depends on how the company is doing this year because you know that companies outside the server ruble and blockchains that experiment accepting payments in btc if they see that it does not work or that nobody used the function they remove btc as a means of payment, in Mi The country has a choice but it is not reliable as I found serious security flaws and sorry for the mistake as I understood that there were only 1,500 restaurants that accepted btc hahahaha

All this makes sense. A miner could be identified. But a small miner like the one you are suggestions does not receive coinbase transactions. He receives a share which he gets from the pool.

Goverment would identify him, but couldn't still coerce him to pay everything. He could just commit russia government bitcoin address with a fraction of his hashpower, and there is no way he could be tracked.

They will just go after miners, pretty easy to spot the little guys, the average consumption per household in Russia is about 2400Kwh per year, an S17 does that in a month, the big guys are even easier to spot, you just have to go through the record of the electric company, how many types of business do you know who have the same electric consumption 24/7 with no spikes or shut down in it?  If they want it, they can find them all in less than a month, and I don't think one ha of solar panel that can be visible from the moon would be a way of hiding your mining operation.

Once identified, they will simply go and ask where do they get their money to pay those bills?
I'm sure that receiving money from a Nigerian prince called Bitfinex LLC each month via a Chinese bank based in the Bahamas will not be a valid excuse.

But, fortunately for us and for the miners in Russia, it's not about the law, it's about the government wanting to enforce those laws, and we all know they are pretty lazy when it comes to this.
One more thing, I would like to see the original of this story and report, google isn't helping me at all with this subject.

This makes absolute no sense, because government cannot really control miners.

A mining pool may be based in Russia, but the hashing power may come from somewhere else.

In the end, even if the goverment could effectively track mining pools and miners, miners would just move their operations to a more free country. Or just move their hashing power to a pool based somewhere else.

A month after Russia's President Vladimir Putin gave the go-ahead to the Digital Financial Assets (DFA) law, a potential reform is now looming that would legalize Bitcoin mining, but ban the incentives miners receive for your activity.

The Ministry of Finance proposed a set of amendments to the law that would prohibit all cryptocurrency transactions, limiting their use to three areas: inheritance, bankruptcy-related operations, and court executions.

Local media pointed out that the intention of the reform is to legalize Bitcoin mining, however, miners could not receive the remuneration as they would risk being fined up to 100,000 rubles ($ 1,300) and be sentenced to seven years in prison. . In the case of legal persons, the fine would amount to 1 million rubles ($ 13,000).

Dmitry Sakharov, CEO of the Moscow Digital School, commented that the situation is complex and it is unclear how miners would receive the incentives. "Experts may try to come up with some interesting legal structures, but all of them will carry significant risks of applying administrative (fines) and criminal (imprisonment) liability."

The intention to modify the recently approved law is contradictory since cryptocurrency mining is sustained precisely by the incentives that miners receive as a return on their investment. If the direct payment of incentives is prohibited, an uncertainty is created since it is unknown what would be the mechanism to compensate for the work carried out to maintain the network.


Quoted by digital means, lawyer Anton Babenko specified that it would be "difficult to say how the rules that allow the use of mining equipment in Russia prohibit receiving payment in digital currency."

In this regard, it is possible to speculate a scenario in which the miners continue to develop their work (those who accept), but the bitcoins of the rewards go to wallets controlled by the government. In theory, the authorities would receive the funds, deduct taxes, distribute the rewards and encourage activity in the country.

The problem could arise if transparency guarantees are not presented in the allocation of resources, which would generate corruption. Furthermore, the government would not be obliged to transfer the bitcoins either as it could decide to send fiat money instead of the cryptocurrencies.

Interestingly, Jakhon Khabilov, head of the Sigmapool mining consortium, told digital media that in Russia only the smallest mining farms accept payment in cryptocurrencies. The largest receive payment in fiat currency through bank transfers.

It should be mentioned that, according to the record kept by the University of Cambridge, Russia is the third country in the world with the highest processing power in the Bitcoin network with almost 7% hash rate. They are followed by the Russian Federation: China with 65% and the United States with 7.2%.

The regulations that Russia applies to bitcoin and cryptocurrencies in general are generating more confusion about what is the legislative tone with which they are assumed. The country recognizes Bitcoin legally, but maintains prohibitions to use it as a payment method.

The government classifies it as an investment mechanism that is only accessible to qualified operators, in accordance with the provisions issued by the central bank.

Other regulations that could be passed include that mining farms must report their operations to the national government. Processing centers must disclose their computing capacity, how the data is stored, what their services are, and what the operating cost is.