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Following the legalisation of the broader crypto industry in January, Russia is now attempting to regulate cryptocurrency mining.
Local lawmakers have become more serious about regulating the industry as Russian cryptocurrency advocates work to attract global crypto mining operators.
Anatoly Aksakov, chairman of the Russian State Duma Committee on Financial Markets, claimed that Russian lawmakers are now considering recognizing the crypto mining industry as a form of entrepreneurship under local business laws, TASS news agency reported on Wednesday.
“As this [crypto mining] is a type of entrepreneurial activity, it is obviously necessary to include it into the state register, to regulate it as a type of entrepreneurship under an appropriate code, and impose relevant taxation,” Aksakov said.
He said that the government is actively working on several legal initiatives related to the crypto industry, expecting to move forward with bills for crypto taxation, mining and digital currency issuance in the near future. Aksakov also stressed the need to provide more regulatory clarity for digital currencies, stating:
“We still need to discuss what digital currency actually is, although we call it currency, it is rather used as a financial instrument, or a financial asset that is a subject to investment, rather than a means of payment.”
According to Nikita Soshnikov, a former senior lawyer at Deloitte CIS and director of Alfacash, “The practical ramifications for the industry will, of course, be restricted to business registration and tax duties, with some degree of formal recognition as a genuine corporation.”
In January 2021, Russia formally enacted a basic legislative framework for regulating cryptocurrencies such as Bitcoin (BTC) as part of the law “On Digital Financial Assets,” outlawing the use of crypto as a payment method. While the law legally legalised cryptocurrency investment, it did not establish clear laws for many specific industry features, such as taxation, mining, rules for owning and reporting crypto holdings, and so on.
In February, the Russian State Duma approved a separate measure on crypto taxation in its first reading, requiring people to record crypto transactions totalling more than $7,800 per year.
In August, the Russian Federation’s Council of Judges issued an official statement regarding Russian judges’ rights to possess cryptocurrency. Citing local court norms, the organisation particularly encouraged local judges to avoid storing cryptocurrencies, as they are regarded as a form of foreign financial instrument.