3 new Russian regions seek to ban crypto mining, over a dozen have imposed restrictions

Russian regions where crypto mining is partially or fully prohibited are likely to grow in number with another three asking for Moscow’s permission to adopt a ban.

A government commission is going to review the latest requests next month but authorities have already curbed coin minting activities in at least a dozen regions of the Russian Federation.

More Russian regions want to ban crypto mining

Bitcoin miners in another three regions of Russia are bracing for a ban that local officials want to see imposed on their operations. The news comes ahead of a meeting of a government commission in May, which will decide on the matter.

The mining restrictions may be introduced in the north of Karelia, in the Penza region and parts of Khakassia, a republic in Southern Siberia, the official Tass news agency reported, quoting Russia’s energy ministry.

“We are talking about three regions: Karelia (its northern part), Penza Oblast and Khakassia (some of its districts),” the department’s press service detailed.

The time frame and the precise scope of the restrictions are yet to be determined. The ministry declined to comment on whether the ban will be in place only during the heating season, between November 15 and March 15, or if it will be permanent.

The energy ministry’s latest statements come after the head of its Department for the Development of the Electric Power Industry, Andrey Maksimov, revealed earlier that several more regions want to ban mining. The upcoming government meeting was confirmed by Deputy Prime Minister Alexander Novak.

Restrictions on crypto mining have already been introduced in over a dozen Russian regions and territories – Dagestan, Ingushetia, Kabardino-Balkaria, Karachay-Cherkessia, North Ossetia, and Chechnya as well as the annexed parts of the Ukrainian oblasts of Donetsk, Luhansk, Zaporizhzhia, and Kherson.

Cryptocurrency mining has been also banned in some areas of Buryatia and the Transbaikal region during peak times of electricity consumption, the business news portal RBC noted in a report. This year, the measures were in place between January 1 and March 15. Starting from next year, the restrictions will cover the period between November 15 and March 15.

Parts of Irkutsk region hit with permanent ban

On April 7, the federal government imposed a year-round ban, until March 15, 2031 on mining activities in the south of the Irkutsk Oblast, responding to a request from the Siberian oblast’s governor, Igor Kobzev, who complained about the “excessively high load” on the region’s power grid caused by miners.

The Siberian region, dubbed “the mining capital of Russia,” has attracted a significant number of crypto miners over the past few years with its low electricity rates. The local authorities claimed the ban has freed up 320 MW of generation capacity.

However, it became clear that the unused electricity has not been distributed to other consumers. In fact, the temporary ban resulted in significant financial damages for the region’s power distributor. The IESK utility announced it registered around 800 million rubles (almost $9.6 million) in lost profits.

Industry warns of crypto miners going underground

Members of the mining industry, like the Chairman of the Industrial Union of Miners in Irkutsk, Maria Yesipova, have warned that the restrictions are inflicting losses on legal mining farms and will eventually force some of them to go back to basements and garages, increasing the burden on distribution networks in residential areas.

Crypto mining has been recognized as a legal business activity in Russia, where companies and individual entrepreneurs are required to register with the Federal Tax Service (FNS). Citizens are allowed to mine until they reach a maximum monthly power consumption of 6,000 kWh.

Earlier this month, the FNS announced it had 722 miners and operators of mining infrastructure registered as of April 1. According to the tax authority, Krasnoyarsk Krai, Irkutsk Oblast and the Republic of Tatarstan have the largest concentrations of legal crypto mining farms.