A Russian lawmaker said that cryptocurrency miners that are illegally engaging in mining activity by connecting their equipment to the country’s power grid should be sent to prison. The lawmaker had announced recently that his nationalist party was developing draft law aimed at regulating the cryptocurrency activity in the country. Another high-ranking parliamentarian said that the state would not offer any support to the industry. The topic of regulation of crypto mining has become a prominent one in Russia and it is being actively discussed by the lawmakers. A member of the State Duma, which is Russia’s lower house of parliament, Andrey Lugovoy threatened that crypto miners would face jail time for plugging their hardware into the country’s electrical grid without permission.
The deputy said that if crypto mining has to be legalized in the country, then miners should first reach out to the respective utility in order to power their equipment. He said that if these miners are denied access, yet they still connect their devices to the distribution network, then they would violate the Criminal as well as the Administrative Code of the Russian Federation. In November, Lugovoy had disclosed that the nationalist party he belongs to i.e. the Liberal Democratic Party of Russia, is gearing up to introduce draft legislation for regulating cryptocurrency mining.
The lawmaker stated that adopting this legislation would benefit the country, its citizens, along with entrepreneurs who want to enter the crypto space legally. He said that regulating this activity was sensible. The deputy believes that mining companies should be charged different electricity rates and their profits should also be subject to taxation, after electricity costs and labor costs have been deducted. Lugovoy said that miners were taking advantage of subsidized and cheap electricity, without paying any taxes.
Anatoly Aksakov, head of the Financial Market Committee of the parliament, said that Bitcoin miners shouldn’t expect any kind of support from the government because their activity doesn’t have any ‘social significance’. The lawmaker is also in support of regulating crypto mining and imposing taxes on the activity. He revealed that the State Duma would have their first meeting in December about crypto regulation. The Central Bank of Russia (CBR) has prepared a special report that will be launched in the meeting and the members would focus on broadening the legal framework relating to cryptocurrencies. Only a limited number of crypto-related activities are regulated by the Russian law introduced this year called ‘On Digital Financial Assets’.
Crypto mining is not one of the activities it regulates. Due to the ongoing clampdown on crypto mining activities in China, Russia has become a prominent destination for numerous mining operations because of its high energy resources. The members of the crypto industry think that Russia can become a leader in this space with the help of moderate regulation. However, there have been complaints from authorities in some regions of Russia like Irkutsk, which is known for lowest rates of electricity in the country. They have said that power shortages are occurring because of illegal crypto mining activities.