Russia Proposes Draft Law Imposing Prison Sentences for Illegal Cryptocurrency Mining

The Russian Ministry of Justice has put forth a draft law that seeks to impose criminal penalties, including imprisonment, for unauthorized cryptocurrency mining activities. Published on December 30 on the government’s regulatory legal portal, the amendments are set to revise both the Criminal Code and the Criminal Procedure Code of the Russian Federation. This initiative is aimed at formalizing accountability for digital currency mining outside the regulatory framework established last year. Under the proposed law, those engaged in illegal mining could face fines of up to 1.5 million rubles or forced labor for a maximum of two years. More severe penalties, including up to five years in prison, could apply in cases involving organized crime or significantly large financial gains. A new article, 171.6, would categorize illegal mining as any extraction of digital currency by individuals or organizations not registered in the official state registry of cryptocurrency miners. Liability would arise from activities causing substantial harm to citizens or the state, or producing income of at least 3.5 million rubles. Punishments would include up to 480 hours of compulsory labor or two years of forced labor for offenses meeting these criteria. The draft also specifies that aggravating factors, such as substantial damages or income exceeding 13.5 million rubles, could result in fines between 500,000 and 2.5 million rubles, or equivalent to one to three years of the offender’s income. Additional sanctions may involve up to five years of forced labor or imprisonment, alongside potential fines. This proposal follows the legalization of cryptocurrency mining, effective November 2024, which mandates registration with authorities for all legal entities and individuals participating in the mining industry. The Federal Tax Service has reported over 1,000 entities listed in these registries as of May 2025, as all miners must declare their production on a monthly basis. The push towards enforcement comes amid worries over the impact of illegal mining on Russia's power infrastructure, with reports indicating significant financial losses attributed to unauthorized operations, especially in regions like the North Caucasus, Novosibirsk, and Volga. In December, Deputy Prime Minister Alexander Novak revealed plans for criminal liability related to illegal mining and lending to be implemented in 2026.