No More Crypto Mining In Ukrainian Areas Under Russia

Russian Deputy Prime Minister Alexander Novak held a meeting with senior officials to ban cryptocurrency mining in the Ukrainian territory occupied by Russia in order to save electricity.

Authorities in Russia are planning to ban cryptocurrency mining in certain regions, including the occupied regions of Ukraine, to ensure smooth operation in case of power outages ahead of the heating season. There will be specific bans on cryptocurrency mining in certain regions of Ukraine, including the occupied Donetsk, Luhansk, Zaporizhizhia and Carson regions. Regions of Russia such as Siberia and the North Caucasus will also be covered by the ban.

Russia Imposes Nationwide Bitcoin Mining Bans

Starting from December 2024, the Russian Ministry of Energy imposes restrictions on mining facilities in energy-stressed regions such as Irkutsk, Chechnya and the DPR.

Reason? Subsidized power + limited energy = tightrope between priorities.

Takeaway… pic.twitter.com/gSGLA5FIc6

— Roundtable by Mario Nawfal (@RoundtableSpace) 17 November 2024

Mining in Siberian regions such as Irkutsk, Buryatia and Zabaikalsky will be restricted seasonally from December 1, 2024 to March 15, 2025, and will continue to be restricted annually from November 15 to March 15, 2031. However, crypto mining in the North Caucasus and occupied territories will be completely stopped from December 2024 to March 2031, without seasonal changes. exceptions.

This decision comes after President Vladimir Putin signed a new crypto regulation on November 1 this year. The laws allow crypto mining under strict regulatory oversight and establish experimental frameworks for cross-border cryptocurrency payments. The bill also bans domestic crypto transactions to ensure economic stability. Russia, the world’s second largest mining center after the United States, uses approximately 16 billion kilowatt-hours of electricity for mining each year. This accounts for approximately 1.5% of total energy consumption and has tripled in 2023, according to data from Statista.

In addition to restricting mining activities, Russia has also made changes to its tax regulations regarding cryptocurrency. Income from mining will now be taxed according to the market value on the date of receipt, provided that operating expenses are deducted. While transactions involving cryptocurrency will not be subject to value added tax, profits will be taxed under a securities tax framework with a maximum personal income tax rate of 15%.

Additionally, Russia has established a bilateral agreement between Moscow and St. Petersburg that reflects a bilateral approach to regulating digital assets while addressing energy challenges. It plans to establish a national cryptocurrency exchange in St. Petersburg. The ban on mining in Russian-occupied Ukrainian regions shows that Russia is trying to strengthen its control over local resources, further increasing already tenuous geopolitical tensions.