• The Russian Finance Ministry is attempting to tax crypto miners in order to surmount obstacles thrown up by the nation’s Central Bank and law enforcement agencies.
• The ministry hopes to evade the impasse by using the nation’s tax code regulations.
• The precise form of taxation is as-yet undecided, and will be contained within the framework of a much-delayed draft law on crypto mining.

The Russian Finance Ministry is making a fresh attempt to tax crypto miners in the country, in an effort to overcome the obstacles placed by the Central Bank and law enforcement agencies. For almost a year, the Ministry has been trying to regulate the crypto mining sector, with industrial players urging Moscow to “legalize” their operations. Energy players have also been lobbying the government to approve projects that would allow them to mine tokens using surplus energy and associated gas.

Unfortunately, the plans have been halted by the Central Bank and law enforcement officials. The Central Bank is hesitant to allow miners to sell their coins on overseas exchanges, for fear that these coins would “enter” the Russian economy, and law enforcement agencies are worried that this could lead to money laundering. To try to overcome this impasse, the Finance Ministry has proposed to use the nation’s tax code regulations.

The Ministry has stated that it believes it is fair to levy a tax on the profits made from crypto mining. While any legislative changes to the tax code would need the approval of the Central Bank and the Parliament, the Ministry has said that the existing code contains all the necessary provisions to include crypto miners. However, the precise form of taxation has yet to be determined, and will be included in the framework of the much-delayed draft law on crypto mining.

At the moment, crypto mining is neither legal nor illegal in Russia, as it is not yet classified as an entrepreneurial activity. This means that it cannot be taxed, and so the draft law has become a very important piece of legislation. The Finance Ministry has said that the draft law is still under discussion, and it remains to be seen whether they will be successful in their attempts to tax the crypto mining industry.