Russian President Vladimir Putin has signed laws providing a regulatory framework for cryptocurrency mining operations across the country. However, industry experts state that these laws do not fully “legitimize” crypto mining.

The first law, signed in August, defined key industry terms such as mining and mining pools and introduced registration and reporting requirements for mining businesses. It also bans foreign entities from mining in Russia and gives the government the power to restrict mining in certain regions.

The second law, signed by Putin on October 25, determines the regulations on mining activities and the rules for the circulation of digital money. These laws will come into force on November 1, 2024, but the main parts of them will come into force in March 2025.

Nikita Zuborev, chief analyst at the BestChange stock exchange directory, emphasized that these laws do not fully legalize mining and only set some norms that simplify control.

Zuborev stated that the framework includes the rights of companies and regulatory authorities, energy consumption standards and tax rates. However, he stated that specific tax figures and energy restrictions will be determined by relevant ministries.

Maria Agranovskaya stated that these laws do not legalize mining, but it is useful to clarify legal terms.

Before the implementation of the laws, miners in Russia operated within the “gray zone” because there was no ban on mining. However, the lack of regulation has created uncertainty over issues such as miners’ types of economic activities and electricity charges.

Maximenko said, “On the one hand, the miners had freedom; “On the other hand, they were facing operational challenges,” he added. Mining has been carried out extensively in Russia since 2017.

In addition to creating a legal basis for crypto mining operations, the new laws introduced restrictions prohibiting foreigners from mining in the country.

Maximenko stated that organizations or individual entrepreneurs operating in the energy industry are prohibited from mining. Additionally, the government was given the authority to ban mining activities in areas where there may be a shortage of energy supply.

The previous law, passed in August, bans public advertising of crypto-related services. “In the Russian Federation, it is prohibited to offer digital currencies to an unlimited number of people,” the law states.

While crypto advertising is prohibited, the government allows users to buy, store and sell cryptocurrencies through exchanges and wallets. However, there is currently no officially registered crypto exchange in Russia.

New mining laws do not provide clarity on legal sales methods of digital assets obtained through mining. Maximenko stated that this issue can be addressed with regulatory actions to be adopted during the implementation of the law.

Stating that there is still uncertainty about digital money transactions, Maximenko said that such transactions can only be allowed within the framework of pilot projects.

The new regulations in Russia came after the first cryptocurrency law “On Digital Financial Assets” passed in 2021. This law gave legal status to cryptocurrencies such as Bitcoin, but prohibited the use of such assets as a method of payment.