According to a Russian lawmaker, cryptocurrency miner who illegally connect their equipment to power grids should be sentenced. He recently stated that the draft legislation he is working on to regulate this activity was being prepared by his nationalist party. Another high-ranking legislator has stated that the industry can’t rely on state support.
Mines could be thrown out of work if power is not authorized
Russia is facing the problem of cryptocurrency mining regulation. Lawmakers have actively discussed this topic. Andrey Lugovoy is a member of Russia’s lower house, the State Duma. He threatened miners to go to prison if they connected their devices without permission.
According to the deputy, mining should be legalized. Miners must first contact the utility to get their equipment powered up. He explained that if miners are denied access, but still connect to the distribution system, it will violate both the Criminal and Administrative codes of the Russian Federation.
Lugovoy disclosed in November that the Liberal Democratic Party of Russia (the nationalist group he is part of) was preparing to introduce legislation to regulate cryptocurrency mining. According to the lawmaker, it will be beneficial for Russian citizens and the state as well as entrepreneurs who wish to legally get into the crypto mining business.
According to Lenta.ru Russian news site, the deputy added that regulation of mining is a good idea. In addition to imposing different rates of electricity for miners, the deputy also believes that their profits should be subject to tax after subtracting the costs of consumed energy. Lugovoy claimed that miners used cheap and subsidized electricity to avoid paying taxes.
Cryptocurrency Mining Deemed of ‘No Significance’
Bitcoin miners should not expect support from the government as their activity has “no social significance.” That’s according to a statement by the head of the parliamentary Financial Market Committee, Anatoly Aksakov, who also commented on the matter. This high-ranking lawmaker supports the regulation of mining and taxation.
Aksakov stated that December will see the Duma host the first meeting a working group on cryptocurrency regulation. This group will be launched with an examination of a CBR special report. Its members will concentrate on expanding the legal framework to support cryptocurrencies. The Russian law “On Digital Financial Assets” regulated only some crypto-related activities earlier this year and mining was not one of them.
Recent research shows that Russia is a top destination for Russian mining companies, despite China’s ongoing ban on bitcoin mining. Russia received the majority of Chinese machines this year during the exodus. According to crypto industry members, moderate regulation could make Russia a leading country in this sector. But authorities from Irkutsk (which has one of the lowest electricity rates) have voiced concern about excessive consumption by illegal miners causing power shortages.
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