Bitcoin mining has been officially legalized in Russia.

Russian President Vladimir Putin has approved a new law that recognizes cryptocurrencies as property and introduces taxation for transactions in this area. While cryptocurrency mining activities are exempt from value-added tax, revenues from sales will be taxed at specific rates. This step reinforces the legal status of cryptocurrencies and initiates a new era in the market.

Putin Approves Bitcoin Mining in Russia

The new law regulating the cryptocurrency ecosystem in Russia came into effect on November 29, after being published in the Official Gazette following President Vladimir Putin's approval. The regulation encompasses the recognition and taxation of digital assets as property.

The new legal framework includes profits from cryptocurrency sales in the tax system. Accordingly, individual investors will pay a tax rate of 13% on profits up to 2.4 million rubles, and 15% on income exceeding this amount. On the other hand, Bitcoin and cryptocurrency mining activities are exempt from value-added tax.

One of the significant innovations brought by the regulation is aimed at the Bitcoin mining sector. Businesses operating in the sector will be required to report their operations to local authorities. Those who fail to fulfill this obligation will face a fine of 40,000 rubles (383 dollars).

With the law, cryptocurrencies can be used in foreign trade transactions under Russia's experimental crypto regime. Cryptocurrencies obtained from mining activities will be considered in-kind income based on their market values, and mining expenses can be deducted from the tax base.

The regulation subjects profits obtained from corporate mining activities to a corporate tax rate of 25% starting from 2025. Another noteworthy point is that institutions engaged in mining and cryptocurrency trading, as well as individual entrepreneurs, will not be able to benefit from simplified tax systems.

The mining law signed by Putin on August 8, 2024, allows registered Russian legal entities and entrepreneurs to engage in mining activities since November 1, 2024. Individuals with entrepreneur status will be able to mine Bitcoin within a monthly energy limit of 6,000 kWh. In some regions, temporary restrictions are applied due to energy consumption.

With the clarification of the regulations, interest in leading cryptocurrency exchanges in Russia has also increased. In November, an 8% rise in traffic to these exchanges was recorded.