Russia Imposes Six-Year Ban on Crypto Mining in Select Regions

Key Takeaways

• The ban, which will last for six years until March 15, 2031
• seasonal restrictions will be imposed in three Siberian regions—Irkutsk, Buryatia, and Zabaikalsky.

Russia has announced a regional ban on crypto mining, set to commence on January 1, 2025. The ban, which will last for six years until March 15, 2031, was introduced as part of legislation signed by President Vladimir Putin in August and October 2024.

The ban will apply to ten regions: Dagestan, Ingushetia, Kabardino-Balkaria, Karachay-Cherkessia, North Ossetia, Chechnya, and the newly annexed territories of Donetsk, Lugansk, Zaporizhzhia, and Kherson. These areas have been identified as particularly vulnerable to power shortages due to the strain crypto mining places on the energy grid.

In addition to the full ban in these regions, seasonal restrictions will be imposed in three Siberian regions—Irkutsk, Buryatia, and Zabaikalsky. Mining activities in these areas will be prohibited from January to mid-March in 2025, with the restricted period expanding from November to March in subsequent years. Reportedly, these measures look to alleviate peak energy demand during the harsh Siberian winters, which often place additional pressure on the power grid.

The Russian Cabinet of Ministers has clarified that the ban will apply to both individual miners and mining pools operating in the designated regions. Authorities have emphasized that these measures are essential to prevent power shortages and blackouts, a growing concern as mining operations have expanded in energy-poor regions.

The legislation builds on Russia’s efforts to formalize and regulate the crypto sector. Earlier this year, the country introduced a legal framework for crypto mining, officially recognizing it as a legitimate activity. Under the framework, only registered Russian legal entities and individual entrepreneurs are permitted to mine crypto.

Individual miners are allowed to continue operations without formal registration, but only if their energy consumption remains within government-defined limits. In November 2024, the Russian government approved a federal bill for new taxes on crypto transactions.

 This latest development is part of a broader strategy to address the imbalance in energy distribution caused by large-scale mining operations. Reports indicate that unpaid electricity bills and infrastructure issues in some regions have further worsened energy challenges. 

For instance, Deputy Minister of Energy Yevgeny Grabchak has noted that southern Russia and southwestern Siberia lack the infrastructure to support extensive mining activities, and these issues are expected to persist until at least 2030.

The initial proposal for the ban included 13 regions, such as Irkutsk, which has become a hub for Bitcoin mining due to its low electricity costs. However, the government’s final decision narrowed the scope to the ten regions most affected by energy constraints, with seasonal restrictions applied to the remaining three Siberian regions. Officials have also stated that the list of restricted areas may be revised to help address evolving energy demands in the future.