Russia Moves to Criminalize Unregistered Crypto Mining; 5-Year Jail Terms Proposed
New amendments to the Russian Criminal Code introduce Article 171.6, setting a 6,000 kWh exemption cap and threatening unregistered miners with prison time.
Russia’s Ministry of Justice has published draft amendments to the Criminal Code that would impose prison sentences of up to five years for illegal cryptocurrency mining. The proposal, released December 30 on the federal regulation portal, introduces Article 171.6 to close the enforcement gap left by the country’s November legalization framework, which saw lackluster compliance from the sector.
The Penalties: Article 171.6
The new statute specifically targets miners operating outside the Federal Tax Service’s registry. Under the proposed Article 171.6, penalties scale based on the income generated or damage caused to the state grid:
- Standard Violation: Fines up to 1.5 million rubles (~$19,000) or two years of forced labor.
- Large Scale (Income >3.5M RUB): Up to five years imprisonment.
- Organized Groups/Extra Large Scale (>13.5M RUB): Strict five-year prison terms with additional fines.
The move follows reports that approximately 70% of Russian miners have ignored the registration mandate since the November 1 legalization law took effect. Only roughly 1,000 entities have officially registered, leaving the vast majority of Russia’s hash rate in the gray market.
The 6,000 kWh Threshold
The amendments clarify the “safe harbor” for individual miners. Private citizens can mine without registering as a sole proprietor only if their electricity consumption remains below 6,000 kWh per month. Exceeding this cap without a business license triggers the new criminal liabilities. Additionally, the proposal sets a concrete deadline for intermediaries: illegal infrastructure operators will face prosecution starting July 1, 2027.
The draft legislation is a direct response to energy deficits in regions like Irkutsk, where subsidized household electricity is frequently exploited for industrial-scale mining.
Grid Stability vs. Tax Capture
This escalation signals that the Kremlin is prioritizing grid stability and tax revenue over fostering a permissive environment. By attaching criminal liability to the 6,000 kWh cap, authorities are effectively creating a hard ceiling for home mining setups, forcing larger operations to either identify themselves to the Federal Tax Service or face prison time. The Ministry of Finance has previously noted that the current lack of oversight costs the state billions in unpaid taxes and grid subsidies.
