Three New Russian Regions Try to Ban Cryptocurrency Mining, More Than a Dozen Have Introduced Restrictions

The number of Russian regions where cryptocurrency mining is partially or completely banned is likely to increase: three more regions are planning to appeal to Moscow to impose a ban.

A government commission will consider the latest requests next month, but authorities have already restricted cryptocurrency mining activities in at least a dozen regions of the Russian Federation.

More and more regions of Russia are seeking to ban cryptocurrency mining

Bitcoin miners in three more Russian regions are preparing for a ban that local authorities intend to impose on their activities, information has become known ahead of a government commission meeting in May that will make a decision on the issue.

Restrictions on mineral extraction may be introduced in northern Karelia, the Penza region and some areas of Khakassia, a republic in southern Siberia, the state news agency TASS reported, citing the Russian Energy Ministry.

“We are talking about three regions: the northern part of Karelia, the Penza region and certain areas of Khakassia,” the department’s press service clarified.

The timing and specific scope of the restrictions have not yet been determined. The ministry declined to comment on whether the ban would only apply during the heating season from November 15 to March 15 or would become permanent.

The latest statements by the Ministry of Energy came after the head of the Department for Development of Electric Power Industry Andrey Maksimov reported earlier that several other regions also want to introduce a ban on mining. The upcoming government meeting was confirmed by Deputy Prime Minister Alexander Novak.

Restrictions on cryptocurrency mining are already in place in more than ten regions and territories of Russia – Dagestan, Ingushetia, Kabardino-Balkaria, Karachay-Cherkessia, North Ossetia and Chechnya, as well as in the annexed territories of the Ukrainian regions: Donetsk, Luhansk, Zaporizhia and Kherson.

In some areas of Buryatia and the Zabaikalsky Krai, a ban on cryptocurrency mining during peak electricity consumption hours has also been introduced, according to a report by the business news portal RBC. This year, the measures were in effect from January 1 to March 15. Starting next year, the restrictions will apply to the period from November 15 to March 15.

A permanent ban has been introduced in some areas of the Irkutsk region

On April 7, the federal government imposed a year-round ban until March 15, 2031, on mining in the southern Irkutsk region in response to an appeal from Siberian Region Governor Igor Kobzev, who complained about the “excessively high load” on the region’s energy system due to miners’ activities.

The Siberian region, known as the “mining capital of Russia,” has attracted a significant number of crypto miners in recent years thanks to its low electricity rates. Local authorities said the ban has freed up 320 megawatts of generating capacity.

However, it turned out that the unused electricity was not redistributed to other consumers. In fact, the temporary ban resulted in significant financial damage to the regional energy supply company. The energy supply company IESK reported lost profits of about 800 million rubles (almost $9.6 million).

Industry Warns Cryptocurrency Miners May Go Underground

Mining industry officials, including Maria Esipova, chair of the Irkutsk Industrial Union of Miners, warn that the restrictions are hurting legal mining farms and could eventually force some to go underground, putting strain on distribution networks in residential areas.

Cryptocurrency mining is recognized as a legal business activity in Russia, where companies and sole proprietors are required to register with the Federal Tax Service (FTS). Citizens are allowed to mine as long as their maximum monthly electricity consumption does not exceed 6,000 kWh.

Earlier this month, the Federal Tax Service reported that as of April 1, it had registered 722 miners and mining infrastructure operators. According to the tax authority, the highest concentration of legal cryptocurrency mining farms is observed in the Krasnoyarsk Territory, Irkutsk Region, and the Republic of Tatarstan.

Source: cryptonews.net