As cryptocurrency mining gains traction globally, Russia has emerged as a key player, balancing economic opportunities with energy constraints due to grid limitations and regional shortages. Recent legal developments have generally legalized mining, but the combination of mining with self-generated electricity remains a complex and ambiguous area under Russian law. This article explores the current regulatory framework, the “grey zone” surrounding off-grid mining, and the need for further clarity to guide businesses engaged in crypto mining.
The Legal Framework: A Clear Prohibition with Exceptions
Russian law imposes a strict prohibition on combining cryptocurrency mining with electricity production. Article 6 of Federal Law No. 36-FZ of 2003 (as amended) explicitly bans this combination, reflecting concerns over energy grid stability and regulatory control. Meanwhile, Article 36 of Federal Law No. 35-FZ on Electric Energy permits energy production facilities with a capacity of up to 25 MW to operate without mandatory grid connection. However, this exemption does not override the mining ban, creating a tension for businesses seeking to use self-generated power for mining.
A potential exception arises from Government Regulation No. 1468 of November 1, 2024, as amended by Regulation No. 341 of March 21, 2025. These regulations suggest that the mining ban may not apply in cases where there is no “technological connection” to Russia’s Unified Energy System or isolated territorial systems. Specifically, Regulation No. 1468 allows entities to request confirmation from grid authorities—such as the organization managing the national electric grid or the system operator—verifying that their energy-receiving devices and power facilities are not connected to the grid. This provision opens a narrow pathway for off-grid mining, particularly for operations using self-generated power up to 25 MW.
The Grey Zone: Liberal Interpretation Meets Legal Risks
The interplay between these laws creates a regulatory “grey zone.” Some interpret Regulation No. 1468’s non-connection exception as indirectly permitting mining with off-grid, self-generated electricity. This view is appealing for companies aiming to leverage Russia’s abundant energy resources while avoiding grid strain. However, Russia’s positivist legal system—where only explicitly permitted activities are allowed—casts doubt on this liberal stance. Without clear statutory permission or official confirmation of non-connection, combining mining and power generation carries significant risks, including potential fines or operational shutdowns.
Recent regulatory trends underscore this caution. Since November 2024, Russia has tightened mining oversight, requiring registration of the mining operations and imposing energy consumption limits. The latter carried out by regional bans in ten energy-stressed regions, effective from January 1, 2025, to March 15, 2031, further highlight the government’s focus on controlling mining’s energy impact. While these measures address different issues, they signal a cautious regulatory approach, making unverified off-grid mining a risky proposition.
Awaiting Regulatory Clarity
The current framework leaves businesses in a precarious position. Companies like yours can apply for grid non-connection confirmation under Regulation No. 1468 to mitigate risks, but the process is bureaucratic and untested. The absence of explicit legislation permitting off-grid mining with self-generated electricity underscores the need for regulatory clarification. As Russia refines its cryptocurrency policies—evidenced by laws recognizing digital assets as property and exempting mining from VAT—further guidance on this issue is likely forthcoming.
Until such clarity emerges, the combination of mining and self-generated electricity remains a “to be determined” (TBD) area. Businesses must tread carefully, balancing the economic potential of off-grid mining with the legal uncertainties of Russia’s positivist system.
How We Can Help
At DP, we specialize in navigating complex regulatory landscapes. Our team can assist with requesting non-connection confirmations, assessing compliance risks, and staying ahead of Russia’s evolving cryptocurrency laws. Reach out to us to explore how we can support your mining operations in this dynamic regulatory environment.
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This article is intended for informational purposes only and does not constitute legal advice. For specific inquiries related to this article or our firm’s expertise in Tech Law, please feel free to reach out to us at info@danilovpartners.com.