Bitcoin mining, the computational process securing the Bitcoin blockchain, is the backbone of the cryptocurrency ecosystem, enabling decentralized trust and powering the “internet of value.” In 2025, mining’s legal landscape is evolving rapidly, driven by energy demands, tax policies, and regulatory shifts. As global leaders in cryptocurrency law, Danilov Partners examines recent legal developments in core mining jurisdictions (United States, China, Russia, Canada) and emerging hubs (Ethiopia, Paraguay, UAE, Iran, Kazakhstan, Germany) since January 1, 2025. These changes impact miners, investors, and stakeholders worldwide. Our firm will provide regular updates in our “Trends” corner on these markets and other crypto niches, such as stablecoins and decentralized finance, to guide clients through this dynamic terrain.
United States (36–40% of global hashrate)
The U.S. leads mining, bolstered by a pro-crypto administration. A January 23, 2025, executive order established the President’s Working Group on Digital Asset Markets, easing banking access for miners. The SEC rescinded Staff Accounting Bulletin No. 121 (January 21, 2025), removing restrictive custody rules, while the OCC clarified in May 2025 that banks can custody crypto. The Strategic Bitcoin Reserve (March 6, 2025) uses seized assets, raising compliance questions. States like Texas offer tax incentives, but New York’s fraud bill and environmental rules tighten oversight. New IRS tax rules demand rigorous reporting, requiring expert legal navigation.
China (12–14% of hashrate)
Despite a 2021 mining ban, underground operations persist, leveraging cheap coal and hydropower. Since January 2025, enforcement has intensified, risking asset seizures for unlicensed miners. Sanctions complicate foreign investment, demanding careful legal strategies for compliance and risk mitigation.
Russia (12–16% of hashrate)
New 2025 laws formalized mining, requiring registration and AML compliance. Tax incentives for renewable energy use are proposed, but sanctions and high tariffs pose challenges. Legal counsel is essential for navigating Russia’s regulatory and geopolitical complexities.
Canada (3–9% of hashrate)
Canada’s hydropower-driven mining faces stricter 2025 environmental regulations in Quebec and new federal tax reporting rules. The U.S. Labor Department’s 2022 crypto-in-401(k) policy reversal boosts investment, but energy disputes require legal expertise.
Ethiopia (2.5% of hashrate)
Ethiopia’s low-cost hydropower from the Grand Ethiopian Renaissance Dam has attracted miners, generating $55 million for Ethiopian Electric Power in 2024. Since January 2025, the National Bank of Ethiopia reaffirmed the Birr as sole legal tender, but mining is permitted under INSA oversight, requiring registration. Rising electricity tariffs (up to 92 birr/month by 2027) and currency retention policies challenge profitability, necessitating due diligence for tax and compliance.
Paraguay (3.5% of hashrate)
Paraguay’s Itaipú Dam fuels mining, but 2025 regulatory volatility, including proposed bans, creates uncertainty. Legal frameworks for tax and energy use are critical for operators.
UAE (emerging)
Government support and energy diversification drive mining growth, but 2025 cooling regulations for data centers increase costs. Legal advice on licensing and compliance is vital.
Iran (4% of hashrate)
Cheap hydropower attracts miners, but U.S. sanctions tightened in 2025 complicate operations. Miners face licensing and AML scrutiny, requiring robust legal strategies.
Kazakhstan (6–14% of hashrate)
Post-2021 China ban, Kazakhstan’s cheap energy drew miners, but 2025 energy restrictions and tax hikes reduce its appeal. Legal navigation of licensing is key.
Germany (4–5% of hashrate)
High-cost renewables drive sustainable mining, but strict 2025 EU MiCA regulations impose bank-like licensing and capital requirements, increasing compliance burdens.
Implications for Stakeholders
Core jurisdictions offer stability but demand tax and AML compliance, while emerging hubs like Ethiopia provide opportunities tempered by regulatory and geopolitical risks. Danilov Partners helps clients navigate these challenges, from securities compliance to cross-border structuring. Contact us for tailored legal solutions.
This material is for informational purposes only and does not constitute legal advice. For specific inquiries, please contact us at info@danilovpartners.com.