The number of Russian regions where cryptocurrency mining is partially or completely banned is likely to grow: three more regions will appeal to Moscow to impose a ban.
A government commission will consider new requests next month, but authorities have already restricted mining in at least twelve regions of the Russian Federation.
Growing number of Russian regions seeking to ban cryptocurrency mining
Bitcoin miners in three Russian regions are bracing for a ban that local authorities intend to impose on their activities. The news comes ahead of a government commission meeting in May that will decide on the issue.
Restrictions on mineral extraction may be introduced in the northern part of Karelia, in the Penza region and some areas of Khakassia, a republic in southern Siberia, the official news agency TASS reports, citing the Russian Ministry of Energy.
“We are talking about three regions: the northern part of Karelia, the Penza region and certain areas of Khakassia,” the department’s press service clarified.
The timing and exact scope of the restrictions have not yet been specified. The ministry did not comment on whether the ban would be in effect only during the heating season from November 15 to March 15 or would become permanent.
The latest statements by the Ministry of Energy came after the head of the Department for Development of Electric Power Industry Andrey Maksimov reported earlier that several more regions want to ban mining. The upcoming government meeting was confirmed by Deputy Prime Minister Alexander Novak.
Bans on cryptocurrency mining have already been introduced in more than ten regions and territories of Russia – in Dagestan, Ingushetia, Kabardino-Balkaria, Karachay-Cherkessia, North Ossetia and Chechnya, as well as in the annexed Ukrainian territories: Donetsk, Luhansk, Zaporizhia and Kherson regions.
In some areas of Buryatia and the Zabaikalsky Krai, a ban on cryptocurrency mining during peak electricity consumption hours has also been imposed, the business news portal RBC reports. This year, the measures were in effect from January 1 to March 15. Starting next year, the restrictions will apply to the period from November 15 to March 15.
A permanent ban has been introduced in some areas of the Irkutsk region
On April 7, the federal government imposed a year-round ban until March 15, 2031, on mining in the southern Irkutsk region in response to an appeal by Siberian Region Governor Igor Kobzev, who complained about the “excessively high load” on the region’s energy system due to miners’ activities.
The Siberian region, dubbed the “mining capital of Russia,” has attracted many crypto miners in recent years thanks to low electricity rates. Local authorities said the ban has freed up 320 megawatts of generating capacity.
However, it turned out that the unused electricity was not redistributed to other consumers. In fact, the temporary ban resulted in significant financial losses for the regional energy supply company. The energy supply company IESK reported that it suffered about 800 million rubles (approximately $9.6 million) in lost profits.
Industry Warns Crypto Miners Go Underground
Mining industry officials, including Maria Esipova, chair of the Irkutsk Industrial Union of Miners, warn that the restrictions are hurting legal mining farms and could eventually force some to go underground, putting strain on distribution networks in residential areas.
Cryptocurrency mining is considered a legal business activity in Russia, where companies and sole proprietors are required to register with the Federal Tax Service (FTS). Citizens are allowed to mine as long as their maximum monthly electricity consumption does not exceed 6,000 kWh.
Earlier this month, the Federal Tax Service reported that as of April 1, there were 722 registered miners and mining infrastructure operators. According to the tax authority, the highest concentration of legal mining farms was recorded in Krasnoyarsk Krai, Irkutsk Oblast, and the Republic of Tatarstan.
Source: cryptonews.net
