Senior Kremlin Official Suggests Treating Crypto Mining as Russia’s “Hidden Export”

Russia's senior official, Maxim Oreshkin, has proposed that the country recognize crypto mining as a form of export in its official trade accounts. He pointed out that, despite digital assets not physically crossing borders, they still constitute a significant portion of wealth that flows abroad.

Key Takeaways:

Maxim Oreshkin advocates for counting crypto mining as an export in Russia.
Industry leaders report that Russia generates tens of thousands of Bitcoins annually, earning around 1 billion rubles per day.
New regulations have imposed a corporate tax of up to 25% on mining income.

During his address at the Russia Calling! investment forum, Oreshkin emphasized the importance of acknowledging the substantial sums generated by the crypto mining industry, which largely remain unaccounted for in official economic statistics. These transactions impact both the foreign-exchange market and the nation's balance of payments.

Senior Kremlin Official Proposes Counting Crypto Mining as Russia’s “Hidden Export”

Russia Moves to Classify Crypto Mining as a New Export

Russia made a significant step forward by legalizing cryptocurrency mining on November 1, 2024. Oreshkin characterized this sector as a "new export item" that is undervalued by the government. He argued that because cryptocurrencies can be used for imports through various channels, these transactions should be included in the country’s trade assessments.

Experts in the industry report that the volume of mining is substantial. According to Oleg Ogienko, CEO of Via Numeri Group, Russia could produce "tens of thousands" of Bitcoins this year. Sergey Bezdelov, leader of the Industrial Mining Association, projected the annual output to be around 55,000 BTC for 2023 and approximately 35,000 BTC for 2024, impacted by changes in miner rewards.

The financial implications are also noteworthy. Mikhail Brezhnev, co-founder of mining supplier 51ASIC, estimates that daily earnings from mining across Russia are around 1 billion rubles. He connects this figure to Russia's proportion of global computing power and Bitcoin prices. As mined coins can directly settle import payments, Brezhnev argues that there is a compelling case for these transactions to be officially recognized.

Additionally, regulatory bodies are tightening their grip on the industry. Legal entities and sole proprietors are required to register with the Federal Tax Service to mine, and hosting providers need to be recorded separately. While household miners using less than 6,000 kWh monthly are exempt from registration, they must report all income. For corporate miners, the tax rate stands at 25%, whereas individuals face progressive rates between 13% and 22%, with non-residents taxed at 30%.

Illegal Crypto Mining Challenges Russia's Economy

Recent investigations have highlighted that illegal and semi-legal crypto mining is costing Russia millions of dollars annually due to electricity theft and unpaid taxes. A report by broadcaster Ren TV disclosed that many miners evade registration to dodge high energy tariffs and tax responsibilities, which has driven segments of the industry underground, contributing to significant losses for the national budget.

Despite the legalization of industrial crypto mining and the establishment of a regulatory framework for registered operators, many small-scale miners are reportedly choosing noncompliance. While larger companies like BitRiver and Intelion adhere to regulations, numerous independent miners are implicated in practices such as manipulating meters, bribing officials, and covertly colluding with utility workers.

Consequently, the burden of the stolen electricity costs falls on households and legitimate businesses, straining Russia’s electrical grid and fiscal resources.