150 Russian Firms Have Already Applied for Crypto Mining Permits, Says Gov’t

Russian firms are rushing to apply for crypto mining permits, the state tax body has confirmed, with 150 applications already filed.

RBC reported that the Federal Tax Service chief Daniil Egorov said the applications were all filed after November 1.

Crypto Mining Permits: ‘Real Rush Is Yet to Begin’

Egorov added that the process was “only just getting started.” And said he expected more miners to register in the near future.

As of the start of this month, Moscow ordered companies and “individual enterprises” (private entrepreneurs) to sign up to the register.

However, private miners who do not use more than 6,000 kWh per month are exempt from the register.

Those who sign up must provide the Federal Tax Service with data on the cryptoassets they mine, crypto wallet addresses, and other identifiers.

“Everything is going quite quietly and calmly with registration applications. For me, this is a good sign. This is a complex matter. And several things are happening at the same time. Miners need to register information on their data processing centers. They also need to provide their own registration details.”

Russian Federal Tax Service chief Daniil Egorov

Liquefied natural gas has become a crux of Europe’s energy mix since Russia curbed pipeline flows two years ago. While readily available, it comes at a cost, writes @a_shiryaevskaya https://t.co/Qr8xj6Enou

— Bloomberg (@business) November 18, 2024

Energy Issues

Egorov explained that both miners and the tax body also needed to navigate new “interaction” protocols with the Ministry of Energy.

This, Egorov said “is a separate matter that we now need to learn to work with.”

“We need to understand where the ministry permits mining and where it does not. We need to know where there are overloads in the energy system. In some places, miners generally work with gas-powered rigs. They power their connections and generate electricity using gas.”

Egorov

The tax chief was likely referring to a range of largely experimental crypto mining projects that use associated gas at oil drilling sites.

Russian power firms have been working with mining firms on these pilots for several years. And some of these are thought to have expanded in the past year.

Egorov added that the new taxation system was different for individuals and companies. As such, he said regulation needed to be introduced “very, very carefully, little by little, step by step.”

RBC added that the combined revenue of Russia’s biggest crypto mining companies last year amounted to “over 20 billion rubles [$197.4 million].”

Russian mining chiefs say that in 2023, the nation’s industrial computing power was “second only to the United States.”

The nation has also unveiled wintertime bans on crypto mining in several regions, as well as occupied Ukrainian territories.

But President Vladimir Putin this week called on parts of the country with surplus power to develop their crypto mining industries.