Not Declaring Profits Could Result in Prison

A new Russian crypto mining bill proposes sending individuals who fail to declare profits derived from mining to prison.

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, which Deputy Minister Aleksey Moiseev sent in February for consideration to the Ministry of Economic Development, the Ministry of Justice, the Federal Tax Service, the Russian Central Banks and various other departments.

According to the reports, a meeting was held in January with the Deputy Chief of Staff of the Russian Government, Ilya Trunin, where the Finance Ministry was ordered to finalise the bill on crypto mining.

A new version of the crypto mining bill mandates that miners “provide information on the receipt of digital currency” to the tax office. Miners must also provide “information about the unique sequence of characters used to account for transactions with digital currency.” The bill specifies that miners offer this data “in a manner and within the time limits established by the legislation of the Russian Federation on taxes and fees.”

Finance Ministry Suggests Severe Punishment for Offenders

The Ministry of Finance has proposed harsh penalties for miners who do not declare digital assets. The Criminal Code, developed by the Ministry and amended, 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, a miner could face up to two-year imprisonment and a fine of up to 300 thousand rubles.

The Code states that the penalty will be far more severe if the amount not declared exceeds 45 million. The Ministry suggested up to four years imprisonment, a fine of up to two million rubles and forced labor of up to four years.

Harsh Punishment for the Illegal “Circulation” of Digital Assets

The newly proposed crypto mining bill suggests even harsher punishment for the “illegal organisation of the circulation of digital currencies.” The bill details two ways cryptocurrencies can be exchanged for fiat: via foreign crypto exchanges or a Russian platform still under an experimental legal regime.

The bill also states that Russia will have an official register of operators to exchange digital assets, which can be either banks or other legal entities. According to the bill, any activity that does not fit within its framework is considered a violation. Offenders could face up to seven years imprisonment, a fine of up to one million rubles, and up to five years of forced labor.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.