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Cryptocurrencies do not expect any support from the Russian government, miners can be imprisoned

Cryptocurrencies do not expect any support from the Russian government, miners can be imprisoned.

Miners who illegally connect devices to the power grid are being detained, according to a Russian legislature. He recently announced that his nationalist party is working on a bill to regulate illegal cryptocurrency activities. Another senior lawmaker added the industry shouldn’t expect government support.

Cryptocurrency mining is considered “pointless”

According to a statement by the chairman of Parliament’s Financial Markets Committee, Anatoly Aksakov, Bitcoin miners should not expect any support from the government as their activities “have no social impact”. Top lawmakers are in favor of regulating mining as a business and should be taxed.

Aksakov announced that in December the Duma will hold the first meeting of the Working Group on the Regulation of Cryptocurrencies, which will examine a special report prepared by the Central Bank of Russia (CBR) and focus on expanding the regulatory framework for cryptocurrencies. Russia’s “Digital Financial Assets” law regulated only a handful of crypto-related activities earlier this year, and mining isn’t one of them.

Energy-rich Russia has become a major target for mining companies amid the ongoing bitcoin mining crackdown in China, according to a recent report. During this year’s Great Miners’ Escape, the country received most of its equipment from China. Members of the cryptocurrency industry believe that proper regulation can help Russia become a leader in this area. However, authorities in regions like Irkutsk, which have the lowest electricity prices in the country, have complained that excessive consumption by illegal miners is causing electricity shortages.

Unauthorized use of energy can put miners on “long-term vacations”

The issue of regulating cryptocurrency mining is being raised in Russia and the legislature has actively discussed the issue. Andrey Lugovoy, a member of the State Duma House of Representatives, has warned that miners will be jailed for plugging appliances into the mains without official authorization.

According to him, if mining becomes legal, miners should switch to their respective public service industries before turning on their equipment. If they are denied access, but they still connect to the distribution network, then they are violating both the Administrative and Criminal Codes of the Russian Federation.

Lugovoy announced in November that the Nationalist Liberal Democratic Party of Russia was preparing to present a bill to regulate cryptocurrency mining. The legislature stressed that the adoption of the law will benefit Russian citizens, the state, as well as entrepreneurs who want to do business legally.

In an interview with the Russian online portal, he added that regulation of mining would make sense. In addition to imposing different electricity prices on mining companies, the Deputy Minister believes that their profits should be taxed after the cost of energy use and other costs such as labor costs have been deducted. Lugovoy accused miners of consuming cheap, subsidized electricity without paying taxes.

Sources: Coincu

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Disclaimer: This article is for informational purposes only, not investment advice. Investor should research carefully before making decision. We are not responsible for your investment decision

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