Russia’s Justice Ministry has proposed new criminal penalties targeting unregistered bitcoin miners, as officials say most mining activity remains outside the tax system.

Proposed penalties

Draft amendments published Monday would introduce fines of up to 1.5 million rubles (about $19,000) and up to two years of forced labor for illegal mining.

For mining tied to “outsize profits,” the proposal would allow up to five years in prison, up to 480 hours of forced labor, and fines of up to 2.5 million rubles.

The draft also targets illegal mining by an unregistered “organized group,” with penalties that could include up to 2.5 million rubles in fines or up to five years of forced labor or imprisonment.

Registration compliance remains low

Russian miners are required to submit a monthly tax form reporting the amount of digital currency produced.

Only about 30% of miners had registered and legalized operations as of June 19, according to Deputy Finance Minister Ivan Chebeskov.

Chebeskov said at the time:

“Our general approach when we introduced mining regulation into this industry was to bring this industry out of the shadows as much as possible. We have not yet completed this process.”

Current rules and prior legislation

Under rules effective Nov. 1, 2024, miners consuming under 6,000 kWh per month can mine without registering as long as they pay personal income tax on mined bitcoin.

Finance Minister Anton Siluanov previously said there were 1,364 registered miners at the end of October.

President Vladimir Putin signed the mining framework into law in August 2024, which also bars foreign entities from mining in Russia and allows regional restrictions.