Russian Ministry of Justice Drafts Criminal Penalties for Non-Compliant Bitcoin Mining Infrastructure

Russia is preparing to significantly tighten its response to illegal Bitcoin and cryptocurrency mining.

Specifically, new proposals from the Ministry of Justice would introduce severe criminal penalties for unauthorized mining, including steep fines, forced labor, and prison sentences.

The initiative comes a year after Russia formally legalized cryptocurrency mining. To address persistent violations, the Ministry of Justice has drafted amendments to both the Criminal Code and the Criminal Procedure Code.

Notably, the proposals were published on the Official Internet Portal of Legal Information, indicating that the legislative review process is now underway.

Central to the plan is the creation of a new criminal offense that would explicitly ban digital currency mining conducted outside the state registration system. Moreover, the same provision would apply to mining infrastructure operators that violate existing regulatory requirements.

Officials argue that stronger enforcement tools are necessary, as voluntary compliance has remained limited despite the introduction of a legal framework.

Penalties Target Unregistered Mining

Under the draft amendments, individuals mining without proper registration could face fines of up to 1.5 million rubles. In addition, courts would be allowed to impose up to 480 hours of compulsory labor or 2 years of forced labor.

These penalties are intended to deter small and mid-sized operators from operating outside the law. However, for more serious violations, lawmakers are proposing substantially harsher penalties.

According to Interfax, prison sentences of up to five years would apply in cases involving large-scale profits or organized criminal groups.

Income Thresholds Define Severity

The proposed legislation defines clear financial thresholds that determine when mining activity is deemed criminal. Specifically, “significant damage” or “large income” is defined as earnings of at least 3.5 million rubles.

Penalties escalate further when offenses involve organized groups or income exceeding 13.5 million rubles. In such cases, courts may impose higher fines, extended forced labor, or prison terms of up to five years. The specific sentence would be determined by the scale and circumstances of each case, with judges exercising discretion.

Legal Mining Framework Introduced in 2024

The enforcement push builds on Russia’s mining legalization law, which took effect on November 1, 2024. The law permits cryptocurrency mining by companies, sole proprietors, and private individuals.

Businesses and mining infrastructure operators are required to register with the Federal Tax Service and pay taxes. Private individuals consuming less than 6,000 kilowatt-hours of electricity per month are exempt from registration. However, they are still required to declare mined digital assets.

The framework was designed to formalize the sector while preserving opportunities for small-scale miners.

Persistent Compliance Gaps

Despite the new rules, compliance has remained weak. By the end of May 2025, the Federal Tax Service reported just 1,000 registered mining enterprises nationwide.

Subsequent estimates suggested fewer than one-third of mining firms had disclosed their operations. The total number of active crypto farms was estimated at nearly 200,000, highlighting the scale of unregulated activity.

Authorities have linked many of these facilities to tax evasion and unauthorized electricity consumption.

Energy Pressure Intensifies Enforcement Push

The rapid expansion of mining operations has also placed a growing strain on regional power grids. Both legal and illegal facilities have contributed to electricity shortages in several regions.

In response, officials imposed temporary or permanent mining restrictions in roughly a dozen regions. These energy constraints have intensified the government’s enforcement agenda. Consequently, illegal mining is increasingly characterized as a threat to both fiscal oversight and critical infrastructure.

Political Signals and Policy Momentum

The proposed criminal penalties align with earlier government statements. For instance, in December, Deputy Prime Minister Alexander Novak confirmed plans to introduce criminal liability for electricity theft related to cryptocurrency mining. In addition, he outlined administrative penalties for less severe violations.

Subsequent reporting in the Russian press suggested that authorities are accelerating efforts to curb shadow economic activity, with crypto mining emerging as a priority target.

What Comes Next

If enacted, the Justice Ministry’s proposals would significantly raise the stakes for unregistered miners. Overall, the measures reflect Moscow’s determination to fully integrate cryptocurrency mining into the formal economy while safeguarding tax revenues and energy stability.