Russian crypto miners face a fresh squeeze as authorities move to curb energy-draining operations in the Moscow region—and potentially jail unregistered operators.
What’s unfolding
- A government commission overseeing the power sector has backed a proposal to ban crypto mining in the city of Moscow, the surrounding Moscow Oblast, and parts of Kursk, Deputy Energy Minister Evgeniy Grabchak told TASS. The restriction is expected to remain in place until at least 2032.
- Regional officials first raised concerns in late April; the final decision will take their positions into account, RBC reported.
Scope and rationale
- The Energy Ministry has identified at least 65 data-processing centers tied to the grid in Moscow and Moscow Oblast, with a combined capacity of about 734 MW.
- Moscow Oblast’s energy minister, Sergey Voropanov, and other local leaders including Governor Andrey Vorobyov and Moscow Mayor Sergey Sobyanin, have argued mining provides little local economic benefit while straining power networks. Authorities say limiting mining will free capacity for households and industry.
- Kommersant reports the government is also considering bans across 19 regions within Moscow’s power distribution zone—moves that would curb mining across the Central Federal District, Russia’s main economic hub.
- In the Kursk region, Governor Alexander Khinshtein has proposed bans in eight districts and the city of Lgov, citing worsening power issues since the war in Ukraine.
Criminal penalties for illegal mining
- Separately, the State Duma passed a draft bill at first reading that would criminalize unregistered mining and the use of stolen electricity, RIA Novosti and Prime report.
- Penalties could include fines (up to 2.5 million rubles, roughly $35,000), forced labor, prison terms, and property confiscation. Operators tied to organized crime could face up to five years behind bars plus additional sanctions.
Context: legalization vs. clampdown
- Russia legalized cryptocurrency mining in 2024, touting its energy resources and climate as competitive advantages. But rapid clustering of miners in low-cost electricity regions led to local energy deficits.
- In response, the government banned mining in 13 regions until spring 2031 last year; those areas include Irkutsk Oblast, the Republic of Buryatia, Zabaykalsky Krai, most North Caucasus republics, and four occupied Ukrainian regions.
- Registration uptake remains low: the explanatory note to the new draft law says fewer than 1,500 of an estimated 50,000 mining businesses have registered.
What it means for miners
- Miners operating in or targeting the Moscow power zone now face the twin threats of prolonged regional bans and criminal penalties if they run unregistered operations or tap stolen electricity.
- The moves underline a growing tension in Russia’s approach: encourage mining as an industry, but clamp down where it threatens grid stability and public energy needs.
For miners and investors, the shifting mix of regional prohibitions and tougher enforcement raises regulatory risk in one of the world’s more geopolitically complicated crypto hubs.
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