Russia Proposes Prison Terms for Illegal Crypto Mining

The Russian Ministry of Justice has published draft amendments that would introduce a new article, 171.6, into the nation’s Criminal Code, titled “Illegal mining of digital currency and activities of a mining infrastructure operator.” This article formally defines illegal mining as the extraction of cryptocurrency by any individual or entity not included in the official state register maintained by the Federal Tax Service. Liability under this proposed law is triggered when such unregistered activity causes large-scale damage to citizens, organizations, or the state, or generates income of at least 3.5 million rubles.

For these base-level offenses, the draft legislation prescribes penalties including compulsory labor for up to 480 hours or forced labor for a maximum of two years. The sanctions escalate dramatically for aggravated circumstances. According to Part Two of the draft article, offenses committed by an organized group, those resulting in especially large-scale damage, or those generating income exceeding 13.5 million rubles face far harsher punishments. These can include fines ranging from 500,000 to 2.5 million rubles, fines equivalent to one to three years of the offender’s income, up to five years of forced labor, or imprisonment for up to five years. The prison sentence may also be accompanied by an additional fine of up to 400,000 rubles or six months’ worth of the offender’s income.

This push for criminal liability represents the next logical step following the formal legalization of cryptocurrency mining in the Russian Federation, which took effect in November 2024. Concurrent with that legalization, the Federal Tax Service launched special registries requiring all legal entities, individual entrepreneurs, and mining infrastructure operators to register with the authorities. As of the end of May 2025, more than 1,000 participants were listed in these registries. The current regulatory framework also mandates that all miners, including individuals, report their mined digital currency on a monthly basis through a dedicated portal on the Federal Tax Service’s website.

The proposed criminal amendments aim to back this regulatory structure with serious legal teeth. Deputy Prime Minister Alexander Novak confirmed in early December that the Russian government plans to introduce this criminal liability for illegal cryptocurrency mining in 2026. This timeline suggests a period for public commentary and legislative refinement of the draft before it is enacted into law, giving the industry a clear signal to comply with registration and reporting requirements.

The impetus behind this severe crackdown is not merely regulatory formalism but a pressing economic and infrastructural concern. The draft law arrives amid growing alarm over the strain that unauthorized, high-energy-consumption mining operations place on Russia’s national power grid. State-owned power grid operator Rosseti Group reported substantial losses of more than 1.3 billion rubles in 2024 directly attributable to unauthorized “black” mining operations.

These illicit activities have been particularly concentrated in regions such as the North Caucasus, Novosibirsk, and the Volga area. In some cases, operators ran thousands of mining devices, illegally drawing electricity on an industrial scale. This widespread power theft has not only caused significant financial damage but has also prompted over 40 criminal investigations, highlighting the scale of the problem. The proposed criminal sanctions are therefore positioned as a necessary defense mechanism for state assets and critical infrastructure, aiming to deter the massive revenue leakage and potential grid instability caused by unregulated mining.