Russia has witnessed a dramatic rise in legal crypto mining activity, with over 1,000 mining companies now officially registered with the country’s Federal Tax Service (FTS) — a tenfold increase in just six months, according to a top government official.
Crypto Mining Boom in Russia
At a State Duma session held on July 23, Alexey Nechaev, head of the New People Party, confirmed that the number of registered miners had soared from 91 at the beginning of the year to over 1,000 today.
“When crypto mining first emerged in Russia, many called for a ban. But it’s clear now — the future belongs to cryptoassets,” Nechaev stated.
This surge follows a regulatory law introduced last year, requiring crypto mining operations consuming over 6,000 kWh of electricity per month to register with the FTS. The move was part of Russia’s push to bring the once-shadowy crypto mining sector into the formal economy.
Regulation Over Repression
Nechaev praised legislators for opting to regulate rather than restrict the sector. He emphasized that fines and bans had only pushed miners into the shadows, previously causing massive strain on power infrastructure in some regions.
“Entire towns and districts were suffering blackouts due to unregulated mining,” Nechaev noted.
Before the law’s implementation, many miners operated in a quasi-legal space, unable to pay taxes despite attempting transparency. With the new legal framework, miners are now required to report production figures and wallet details to the FTS.
Tax Revenues and Domestic Growth
The new law not only legitimizes operations but is also expected to add over $500 million in annual tax revenue to the Russian Treasury, according to industry insiders.
Nechaev also highlighted that miners are now reinvesting their profits domestically, with many allocating funds to AI development. In 2024 alone, crypto miners have reportedly spent over 5 billion rubles (~$63 million) on AI technologies — signaling a broader technological ambition beyond just crypto.
Russia Now Ranks #2 in Global Bitcoin Mining
According to the Association of Industrial Miners, Russia has emerged as the second-largest Bitcoin mining nation, trailing only the United States. As of summer 2024, Russian miners have contributed to over 16.6% of the global Bitcoin hashrate, exceeding 150 EH/s.
Estimates suggest that miners in Russia produced up to 40,000 BTC (valued at ~$4.7 billion) during 2024 alone — showcasing the scale of the sector.
Crackdown on Illegal Miners May Follow
While the government has embraced regulatory clarity for compliant miners, officials are also preparing to crack down on illegal operators. A leading lawmaker recently proposed classifying cryptocurrencies as intangible property, a move that would allow courts to seize assets from unregistered or illicit miners.
Outlook: Regulation Driving Innovation
Russia’s evolving stance on crypto mining — from suspicion to regulation — reflects a broader shift in state policy. With official recognition, tax compliance, and growing technological investment, Russia’s mining sector is rapidly professionalizing.
As Nechaev concluded:
“Now, with proper rules in place, crypto mining is not only sustainable — it is shaping the future of Russian business.”
