30s Summary

Russian President, Vladimir Putin, has enacted new legislature to govern cryptocurrency mining. The laws provide definitions and regulations regarding mining activity, including stipulating that only Russian residents can mine. The rules, set to take effect in 2024, will also control areas designated for mining and the circulation of digital currency. Insiders suggest these laws serve more to monitor the industry than encourage it. Foreign miners and energy companies are barred from mining. While the laws clarify some aspects of mining, they lack guidelines for legally selling mined coins.

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So, Russia’s President, Vladimir Putin, has put his signature on some new laws that set the boundaries for how people can mine cryptocurrency in the country. But before you get too excited, industry insiders are saying Russia hasn’t really given mining the green light. The laws are more like a set of rules and limits for the industry.

The first law was signed in August, it explained all the jargon, like what exactly ‘mining’ and ‘mining pools’ are and made it mandatory for mining businesses to register and share certain details about their operations. Don’t think you can just pack a bag and head to Russia to mine crypto, though – the law says that’s a no-no for anyone who isn’t already a Russian resident. The government also gets to say which areas can and can’t be used for mining.

Another law signed on October 25 gives a bit more detail about how mining activities can happen and the rules for circulating digital currency. Those rules officially kick in on November 1, 2024, but the most important parts will actually jump the gun a bit and start being enforced in March 2025.

Despite all this, local expert Nikita Zuborev, from the exchange BestChange, reckons that crypto mining hasn’t yet earned the full seal of approval in Russia. He believes the legislation is more about making it easier to keep tabs on the industry than genuinely welcoming it in.

Maria Agranovskaya, a lawyer who knows a thing or two about international law and fintech, backs up Zuborev’s take. She points out that even before the new laws, Russia’s main mining companies were already doing their thing without breaking any rules.

However, lawyer Anna Maximenko feels the new laws have filled a gap that needed to be addressed. Before this, miners in Russia were in a bit of a grey area. There were no laws explicitly banning mining but there was also no clear-cut regulation. So, while miners might have felt free, they also didn’t have any clear guidelines to follow.

The new rules certainly do have a few restrictions. Fancy yourself a mining adventurer from overseas? Sorry, you’re out of luck – foreign miners are out. And if you’re in the power business, like transmission, generation, sale and purchase, or operational power dispatch management, again, no mining for you.

The government can also turn off the mining tap in certain regions if they’re running low on power. The exact areas that might be affected are unclear as yet, but predictions suggest the Far East, South-West Siberia and Southern part of Russia might be on that list.

The rules also put a shock collar on crypto advertisements and don’t allow promotion of digital currency to just anyone. It’s a thumbs down to offering digital currency as payment for goods or services to create a circulation of digital currency. However, you’re still good to buy, store and sell cryptocurrencies via exchanges and wallets, but don’t expect to find an officially registered crypto exchange in Russia.

One thing the laws don’t clarify is how you can legally sell coins you’ve mined. Maximenko suggested this could be covered by new rules that will be made in the future. She admitted there’s still a bit of uncertainty here because the laws don’t explicitly say what is and isn’t okay when it comes to crypto transactions. But she also added that the best interpretation of the law will get clearer over time as more cases come to the fore.

This all comes a few years after Russia put its first cryptocurrency law into effect in 2021. That law did give cryptocurrencies like Bitcoin a kind of official status, but it was clear that you couldn’t use them to pay for stuff. So all eyes are on where these new mining laws will ultimately lead.

Source: Cointelegraph