Cryptocurrency mining is expected to be banned in the capital Moscow, the surrounding Moscow Oblast and parts of the Kursk region for the next six years, according to a recommendation by a state commission competent in the Russian energy sector. This decision was brought to the agenda in order to regulate energy consumption in the country and protect the energy infrastructure of the regions.
Mining restrictions are on the agenda in Moscow and Kursk
Russian Deputy Energy Minister Evgeniy Grabchak stated that the proposed bans could remain in effect until at least 2032. Moscow Oblast Energy Minister Sergey Voropanov stated that crypto mining does not contribute to the local economy, and that previous bans imposed in other regions have yielded positive results. Likewise, Moscow Governor Andrey Vorobyov and Moscow Mayor Sergey Sobyanin also announced their support for mining restrictions.
According to Ministry of Energy data, at least 65 data centers with a total capacity of 734 megawatts are connected to the grid in Moscow and its surroundings. Kursk Governor Alexander Khinshtein pointed out the pressure on electricity supply due to the war and suggested that similar bans be implemented in eight districts and the city of Lgov. According to the local government, the cessation of mining activities will allow for an increase in energy reserves and the provision of more electricity for households and industrial users.
Possibility of the ban spreading throughout central Russia
According to Kommersant newspaper, the government’s agenda includes a ban on crypto mining in a total of 19 regions within Moscow’s electricity distribution area. If this step is taken, relevant activities in the Central Federal District, Russia’s economic center, will be greatly limited.
Mining in Russia became legal in 2024, and the country’s abundant energy resources and cold climate were seen as advantages. However, mining facilities concentrated in regions offering cheap electricity have led to an energy deficit. Last year, both local and federal governments suspended digital currency production in 13 regions until spring 2031. These regions include Irkutsk and Buryatia in Siberia, various republics in the North Caucasus, and four oblasts annexed from Ukraine.
Mini-dictionary: Central Federal District refers to the central area in the administrative division of Russia, the country’s most economically developed, with about 40 million people; Moscow is located in the center of this administrative region.
| Area | Beginning of Prohibition | Ban End | Total Facility (estimated) |
|---|---|---|---|
| Moscow and surroundings | 2024 | 2032 | 65+ |
| 13 regions (Siberia, North Caucasus, annexed areas) | 2023 | 2031 | unknown |
New penalties are on the way for illegal miners
The State Duma, the lower house of the Russian Parliament, adopted a bill criminalizing unregistered mining in its first session. Accordingly, those who work unsupervised or use stolen electricity will face sanctions such as prison and forced labor, as well as heavy fines. Additionally, those who carry out illegal activities in organized groups are subject to a fine of up to 2.5 million rubles (about 35 thousand dollars) and a prison sentence of up to five years. The draft law contains different penalty clauses depending on the extent of damage and the nature of the violation.
In the proposal passed by the State Duma, it was stated that the assets of those who engage in illegal crypto mining could be seized, and the penalty could be reduced or abolished if the damage is compensated.
Russia ranks top in the world in Bitcoin mining. Individual entrepreneurs and companies in the country can legally produce cryptocurrencies as long as they register and pay taxes. However, only about 1,500 of approximately 50 thousand businesses are officially registered.
