Russian Crypto Tax Defaulters May Likely Face Jail Time

A law introducing harsh penalties for crypto miners in Russia who default in the payment of tax has now been drafted.

Therefore, Russian miners are expected to report their digital assets holdings and crypto income in detail as part of the requirement of the Crypto Mining Bill. As part of the necessary information, crypto miners in Russia would submit their wallet addresses. They are likely to face prosecution by the state if found to have defaulted.

Miners with up to 15 million rubles or almost $200,000 who fail to report their crypto income twice within three years, will face two years of jail time as well as labor if applicable. A fine of 300,000 rubles may also be levied against the defaulter. For miners whose crypto assets are up to 45 million rubles, it would be a four years sentence and a fine of up to 2 million rubles.

For now, the Russian Crypto Mining Bill is being revised in Moscow and as part of the revision, persons involved in any illegal trade of cryptocurrency are liable to face charges with substantial fines. 

Russia Delays Crypto Mining Bill

Russian Ministry of Economic Development and other state departments began to exert so many efforts in the legalization of its crypto-mining industry in September 2022, even though the areas under consideration were only those with ample amounts of electricity. The first step they considered was the creation of a group that would look into effective and efficient standards for operating the crypto-mining ecosystem.

The Bank of Russia and the Russian Federation’s Ministry of Finance (MiFin) further confirmed that the crypto mining bill would only apply to locations with abundant electricity. At that time, the bill was scheduled to go public before the end of the year. However, by the end of December, the Russian authorities put the crypto mining bill on hold and postponed it till January. 

The reason for the postponement was that “it could create channels for capital flight from our country. Ostensibly, it will be the activity of buying cryptocurrency, but in fact, the main objective will be capital flight from our country,” according to Anatoly Aksakov, the State Duma’s financial market committee chairman.