Crypto Miners Face Jail Time for Undeclared Profits in Russia13. März 2023
• A new crypto mining bill proposed by the Russian Ministry of Finance suggests imprisoning miners who fail to declare their profits to tax authorities for up to four years.
• The bill also mandates that miners provide information on digital currencies and transactions with them in a manner and within time limits established by the Russian Federal Tax Service.
• If a miner fails to report income from crypto mining two times in three years, they could face up to two-year imprisonment and a fine of up to 300 thousand rubles.
New Crypto Mining Bill Proposed
The Russian Ministry of Finance has proposed imprisoning miners who fail to declare their profits to tax authorities, suggesting up to four years in prison. Local media reports the new proposal is contained in a package of bills sent in February for consideration by various departments.
Penalties For Miners Who Do Not Declare Digital Assets
The Finance Ministry has proposed harsh penalties for miners who do not declare digital assets. The Criminal Code states that if a miner fails to report income from crypto mining on two occasions in three years, and the amount not declared is above 15 million rubles, they could face up to two-year imprisonment and a fine of up to 300 thousand rubles. If the amount exceeds 45 million, then the miner could be subject to up to four years imprisonment, a fine of up two million rubles and forced labor of up four years.
Requirements To Exchange Digital Assets
The newly proposed crypto mining bill suggests even harsher punishment for the „illegal organisation of the circulation of digital currencies.“ Any activity that does not fit within its framework can be punishable with an administrative offense or criminal responsibility depending on circumstances. Additionally, Russia will have an official register of operators authorised exchange digital assets (either banks or other legal entities).
Information Required By Miners
Miners must also provide „information about the unique sequence of characters used to account for transactions with digital currency“ when providing information on digital currencies and transactions with them as mandated by this bill. The bill specifies that miners offer this data „in a manner and within the time limits established by legislation“.
This article provides an overview of the new Russian crypto mining proposal which includes penalizing individuals who fail declare profits from mining activities as well as those engaging in illegal circulation activities related cryptocurrencies. In addition details are provided regarding what type information must be provided by miners when declaring digital assets under this law.