Russian Crypto Miners Want Their Industry Made Legal

Clear legislation regarding crypto mining, could reduce uncertainty in miners' business plans.

According to crypto miners in Russia, they want their business to be legalized, and hope that legal status will help them avoid confrontations with power companies.

According to Lenta, the situation for miners in Siberia's Irkutsk Oblast has worsened recently.

Igor Kobzev, the Governor of the Irkutsk Oblast in southeastern Siberia, has previously requested Alexander Novak, de facto government power chief and Deputy Prime Minister, to complain about unlawful cryptocurrency miners who he claims are causing serious rises in usage.

After a few days of silence, Kobzev has since backpedalled and adopted a conciliatory tone. Late last month, he even stated his desire to assist miners relocate to the area – as long as the government follows through with legislation forcing miners onto new rates.

Many residents in the region, as well as throughout Russia, are paying high subsidised electricity prices intended for residential and non-industrial or non-commercial use.

The mining sector, on the other hand, has been able to gain traction with the authorities since it is not regulated. Power firms have struggled to force miners onto higher fees because mining has no legal status in Russia, and lawmakers continue to make little progress in their legislative efforts.

However, the Oblast's energy supplier, Irkutskenergosbyt, appears to have had enough - and is now taking matters into its own hands. According to Lenta, the company has filed legal action against 85 miners in the region – mostly individuals mining from home – so far; thus far, it has won nine of these cases, with several others remaining active.

Some miners have been furious, while others believe that the power firm has a point - and that it is only the government that has the authority to address the problem.

According to a report published by the news network, Vitaly Borshchenko, the co-founder of BitCluster, a crypto mining equipment maker, stated that “given the lack of clear definitions in [existing] legislation, [it was] unclear on what grounds the use of computing-related devices” was being acknowledged as a commercial operation.

According to a reports, Murad Yaliev, of the Irkutsk-based cryptocurrency mining hotel service MinerWorld, said there was no legal basis for the ban.

Others, however, disagree with the report. According to a separate article from the same media source, EMCD's sales chief Dmitry Kudinov said, “You can see where Irkutskenergosbyt is coming from.”

In other situations, he stated, miners were not being honest about their activities, and the company's debts had risen significantly as a result of increased electricity use. Finally, he said, the cost would have to be paid by local people.

According to Kudinov, the entire problem could have been prevented if a suitable legislative framework had been put in place in Russia from the beginning.

Denis Smirnov, a blockchain specialist at EMCD, added, “Since crypto mining is an [extremely] energy-intensive activity, it should be classified as a commercial activity. I do not believe that Russia will lose its status as an attractive region for miners if mining is recognized as an official [industrial sector]. On the contrary, it will increase the attractiveness [of Russia] as a mining destination.”

Smirnov claims that legislation would provide miners with a more clear picture of the rules, which will reduce uncertainty in their business plans.

He concluded, “Legislative initiatives and regulation will attract a large number of market participants to [Russia], and it is this step that will allow Russia to become the [global mining industry]’s flagship.”

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