$122 Million in Losses: How Untaxed Crypto Mining is Hurting Russia

Russia's legalization of cryptocurrency mining last year has failed to curb widespread tax evasion, with underground operations costing the federal treasury over $122 million in lost revenue. Illegal miners exploit abandoned industrial sites in remote regions, drawing attention through excessive power consumption and grid disruptions.

Current laws require corporate and entrepreneurial miners to register, while allowing unregistered mining for private citizens using under 6,000 kilowatt-hours monthly. Energy companies face outright bans, as do individuals with certain criminal records. Enforcement remains weak—violations often result in minor fines for unauthorized grid connections rather than tax evasion charges.

The loophole may soon close. Authorities appear poised to strengthen penalties as unregulated mining operations continue draining state resources. This shadow economy persists despite Russia's attempt to bring crypto mining into the legal fold, highlighting the challenges of regulating an inherently decentralized industry.