Last updated:
Author
Tim Alper
Author
Tim Alper
Share
Why Trust Cryptonews
Ad Disclosure
We believe in full transparency with our readers. Some of our content includes affiliate links, and we may earn a commission through these partnerships. Read more
Crypto mining hardware sales have tripled in Russia year-on-year, one of the nation’s top Bitcoin mining experts has claimed.
Speaking to the Russian news outlet Prime, Sergey Bezdelov, the head of the Industrial Mining Association said that “in the fourth quarter of 2024,” the demand for industrial mining equipment and services in Russia “increased threefold compared to the same period in FY2023.”
Bezdelov was speaking in the wake of comments from a top lawmaker who said Moscow was ready to “soften” its stance on crypto regulation.
Crypto Mining Hardware a Hit in Russia?
The Industrial Mining Association chief added that there was “also high interest” in Russian crypto mining projects “among foreign market participants.”
Bezdelov said that some of this “interest” in Russian crypto mining was now coming from “fellow BRICS member states.”
In May last year, Bezdelov claimed that the Russian industrial crypto mining market “doubled in size” in 2023.
The expert hinted that recent legal changes had helped boost the popularity of mining in Russia.
A law that came into force on November 1, 2024, allows both “legal entities” (private companies) and “individual entrepreneurs” (private citizens) to mine crypto “legally” if they do not consume more than 6,000 kWh of energy per month.
“Individuals can mine cryptoassets without being included in a state-run register, but within the limits of the electricity consumption threshold. If they go beyond this threshold, citizens must register as an individual entrepreneur and apply for inclusion on the register.”
Bezdelov
Crypto Taxes Incoming?
At present, the register only requires companies and individuals to submit data on transactions and energy consumption.
However, as the body that controls the register also operates Russia’s taxation system, it is highly likely that any miner using more than 6,000 kWh will soon have to pay tax on their earnings.
However, Bezdelov noted that before last year’s legal change, crypto mining was in a “gray” legal zone.
Until November, mining had no legal status. Now, however, Russian law recognizes it as a form of “entrepreneurship.”
While Bezdelov and others have previously said that most (around 90%) of domestic miners focus their efforts on Bitcoin (BTC), Cryptonews.com has seen evidence that suggests many Russian home-based miners prefer Ethereum (ETH).
Last year, Bezdelov said that Litecoin (LTC) is also popular among a smaller group of Russian miners.
The same media outlet wrote that mining is a “good source of additional income.” It added that Russian companies and individuals could use crypto as an “opportunity to diversify their assets.”
It also suggested that firms could use the crypto they mine as a settlement tool “when conducting foreign economic activity within the framework” of the Central Bank’s sandbox.
This type of positive talk about crypto was once almost unheard of in Russian mainstream media outlets.
Politicians once spoke about crypto with scorn. And the Central Bank has led several attempts to issue a China-style crypto crackdown in Russia.
However, President Vladimir Putin last year spearheaded a crypto pivot when he began to speak about crypto mining in glowing terms.
And while many energy-poor areas have issued bans on crypto mining until 2031, Putin has urged other parts of the Russian Federation to mine crypto “if they have surplus energy.”
Tax Boost
The association has claimed that the Russian Treasury could expect to earn over $500 million per year from taxing crypto miners.
Others claim that Russia’s desire to become an AI “powerhouse” has inspired Putin’s crypto pivot.
Bezdelov advised Russian qualified investors to “allocate up to 5% of their portfolios to mining services and digital currencies.”
Softer Crypto Stance Possible, Lawmakers Says
Meanwhile, TASS reported that the chief architect of Russia’s crypto legislation has “allowed for the possibility of softer regulation” for domestic companies using crypto to avoid US, UK, and EU-led sanctions.
The state-run news agency quoted Anatoly Aksakov, the Chairman of the State Duma’s Committee on the Financial Markets, as explaining that crypto “market players” are complaining of “over-regulation” in the Central Bank’s sandbox.
The Central Bank wants all Russian firms who use crypto as a payment tool to exchange coins using the sandbox, rather than dealing directly with overseas partners in crypto.
“We need to quickly launch an experimental [sandbox]. We then need to see how the standards we have adopted in this market work. And then we can make further adjustments later. Quite possibly, we will move toward a softer regulatory [position].”
Lawmaker Anatoly Aksakov, Chairman of the Russian State Duma’s Committee on the Financial Markets
Aksakov also said that firms are not happy with the Central Bank’s protocols. Many, it seems, think these protocols are over-complicated. The lawmaker said:
“Many companies are suggesting that we need to somehow simplify the turnover of cryptocurrencies so that the market can develop successfully. As [crypto settlements] are new and mobile, this is proving to be the case.”
