Illegal Crypto Miners Threatened With Jail Time in Russia

Illegal Crypto Miners Threatened With Jail Time in Russia

Cryptocurrency miners that are illegally connecting their equipment to the power grid should go to prison, says a Russian lawmaker who recently announced that his nationalist party is working on draft legislation to regulate the crypto activity. The industry cannot rely on support from the state, another high-ranking parliamentarian has added. Unauthorized Use of Power Could Land Miners Behind Bars

The issue of regulating cryptocurrency mining is looming in Russia and lawmakers have been actively discussing the topic. Andrey Lugovoy, member of the lower house of parliament, the State Duma, has threatened miners with jail if they plug their hardware into the electrical grid without official permission.

If mining is to become legal, the deputy noted, miners should turn to the respective utility before powering up their devices. And if they are denied access but nevertheless connect to the distribution network, they will be in violation of both the Administrative and the Criminal code of the Russian Federation, he explained.

Lugovoy revealed in November that the Liberal Democratic Party of Russia, the nationalist faction he belongs to, is preparing to introduce a draft law to regulate crypto mining. The adoption of the legislation will benefit Russian citizens, the state itself, as well as entrepreneurs who want to get involved in the business legally, the lawmaker insisted.

Speaking to the Russian online news portal Lenta.ru, he has now added that regulating mining makes sense. Besides imposing differentiated electricity rates for mining companies, the deputy believes their profits should be taxed after deducting the cost of the consumed energy and other expenses such as labor. Lugovoy accused miners of using cheap, subsidized electricity without paying taxes. Cryptocurrency Mining Deemed of ‘No Significance’

Bitcoin miners should not expect support from the government as their activity has “no social significance.” That’s according to a statement by the head of the parliamentary Financial Market Committee, Anatoly Aksakov, who also commented on the matter. The high-ranking lawmaker is a proponent of regulating mining as an entrepreneurial activity and its taxation as such.

Aksakov announced that the Duma will host the first meeting of a working group on cryptocurrency regulation in December. It will launch with a review of a special report prepared by the Central Bank of Russia (CBR) and its members will focus on expanding the legal framework for cryptocurrencies. The Russian law “On Digital Financial Assets” regulated only some crypto-related activities earlier this year and mining was not one of them.

Amid an ongoing crackdown on bitcoin mining in China, energy-rich Russia has become a major destination for mining enterprises, having received the bulk of Chinese mining machines during the miner exodus this year, according to a recent report. Members of the crypto industry believe that moderate regulations could help the country become a leader in the sector. However, authorities in regions such as Irkutsk, which has some of the lowest electricity rates in the country, have complained that excess consumption by illegal miners is causing power shortages. Tags in this story Anatoly Aksakov, Andrey Lugovoy, Bitcoin, Bitcoin Miners, Bitcoin mining, Central Bank, consumption, Crypto, crypto miners, crypto mining, Cryptocurrencies, Cryptocurrency, deputies, deputy, Electricity, Energy, jail, Law, lawmaker, lawmakers, Legislation, Miners, mining, parliament, power, prison, rates, Regulation, Regulations, Russia, russian, State Duma, tariffs, Tax, Taxation, working group

Do you think Russia will regulate cryptocurrency mining in the near future? Share your expectations in the comments section below. Lubomir Tassev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration. Canaan Secures Order for 30,000 Bitcoin Mining Rigs From Genesis Digital Assets MINING | 4 hours ago Court Decision Voids Crypto Mining Contracts in China, Shuts Down Bitcoin Farms MINING | 1 day ago

Image Credits: Shutterstock, Pixabay, Wiki Commons Previous articleNew Cryptocurrency Bill Advances to Senate in Brazil Next articleSnoop Dogg, Deadmau5 and NFTs — The Sandbox Alpha Game Review Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Read disclaimerShow comments More Popular NewsIn Case You Missed ItNovi Launches Whatsapp Integration Pilot Program for Selected Users in the U.S.

Novi, the remittance and payments initiative of Meta (formerly Facebook), has launched a Whatsapp pilot test for customers in the U.S. This means that a small number of Whatsapp users will be able to send and receive payments, as well ... read more.Miami Mayor Francis Suarez Plans to Take a Fraction of His 401k in Bitcoin Indian Prime Minister Modi Tells President Biden"s Summit: Cryptocurrency Should Be Used to Empower Democracy Inflation Plagues American Economy: US Consumer Prices See Fastest Rise in Close to 40 Years Makersplace Plans to Drop World’s First 2pac NFT Collection Authorized by the Shakur Estate