Russia becomes the second largest bitcoin miner, proposes new law on user data

Key takeaways:

• According to recent reports, Russia has overtaken China as the second-largest crypto-mining nation in the world. 

• In the first three months of the year, coin minting consumed 1 gigawatt (GW) of power, according to data provided by Bitriver.

• The Prosecutor General of Russia has requested that digital asset exchanges be required to give user information to the country’s law enforcement organisations.

According to the Kommersant business, Russia has become the second-biggest cryptocurrency mining nation in the world this year. The largest bitcoin mining company in Russia is Bitriver. 

It’s vital to remember that China used to be the world’s top location for cryptocurrency mining, contributing between 65% and 75% of the network’s overall hash rate. However, the worldwide context of cryptocurrency mining has changed since the government essentially outlawed the business in 2021, closing some of the largest operations in the globe.

While having 3–4 gigawatts of mining power, the United States continues to be the greatest cryptocurrency miner in the world. However, between January and March 2023, Russia’s generating capacity hit 1 gigawatt.

Kazakhstan was the second-largest cryptocurrency miner before Russia took the top spot. However, the nation then imposed limitations on cryptocurrency mining activities last year due to a shortage in its regular electrical supply. As a result, it dropped from first to ninth on the list. 

According to BitRiver CEO Igor Runets, mining activity in the US is waning as a result of higher electricity costs and the elimination of tax incentives. As a result of American miners purchasing the great majority of the equipment on credit, he continued, “many over-leveraged companies are in the process of bankruptcy or have already gone bankrupt“

The new record for the Russian federation comes almost a month after the government announced the Launch of a Mutual Fund to Finance Crypto Mining.

Russia suggests obliging Crypto platforms To Share  Data with Law Enforcement Agencies

In another development for Russia’s digital asset landscape, Russian Attorney General Igor Krasnov recommended that crypto platforms be required to divulge data with law enforcement organisations in the country at large.

 The recommendation aims to tighten regulation of virtual currencies and prevent unlawful acts that can take advantage of their anonymity, like money laundering and terrorism financing.

Additionally, he thinks that simply giving cryptocurrencies property rights under Russian law won’t be sufficient to stop the legalisation of illegal earnings. Krasnov suggested regulation to solve the issues brought on by their use for illicit activities.

Igor Krasnov has advocated for the inclusion of cryptocurrencies in Russian criminal law, including the recognition that they might be the subject of crime and infringement, as well as the establishment of rules governing the state’s seizure, storage, and confiscation.

Critics contend that the disclosure of user information to law enforcement authorities may violate people’s right to privacy and stifle innovation in the cryptocurrency industry. However, the initiative’s advocates contend that greater transparency and accountability are required to guarantee the security and stability of the economy.