The Russian government is moving to impose restrictions on cryptocurrency mining across 13 regions, including its primary crypto hubs and several occupied territories in Ukraine. This decision follows the recent enactment of laws aimed at regulating the crypto mining sector.
During a Nov. 19 meeting led by Deputy Prime Minister Alexander Novak, the government commission on electric power development proposed measures to address energy supply concerns in areas facing peak demand challenges. The restrictions would target crypto mining in regions like Irkutsk and parts of Siberia, along with the occupied Ukrainian territories of Donetsk, Luhansk, Zaporizhzhia, and Kherson.
Russian Regions Affected by the Proposed Ban
The mining limitations are expected to significantly impact Siberian regions such as the Irkutsk Oblast, the Republic of Buryatia, and Zabaikalsky Krai. These areas are well-known for their low electricity costs and cold climate—conditions that have made them attractive to mining operations. Other affected regions include the Republic of Dagestan, North Ossetia-Alania, Ingushetia, Chechnya, Kabardino-Balkaria, and Karachay-Cherkessia.
The government plans to enforce these restrictions during the autumn-winter heating seasons until 2031 to prevent energy shortages during periods of high demand.
The proposed measures could deal a blow to Russia’s crypto mining industry, particularly firms like BitRiver, which operate in energy-abundant areas such as Irkutsk. BitRiver’s flagship data centre, launched in 2019 in Bratsk, relies heavily on the region’s hydroelectric capacity, including the 4,500-megawatt Bratsk Hydroelectric Power Station.
These Siberian facilities have long benefited from favourable conditions, including an ample supply of renewable hydroelectric energy, low power tariffs, and a naturally cold climate that reduces cooling costs for mining equipment.
Regulatory Uncertainty Casts a Shadow
Russia has recently enacted a series of laws to regulate the crypto mining sector. In August and October 2024, President Vladimir Putin signed legislation that established a basic regulatory framework for the industry. However, the laws have drawn criticism from stakeholders due to their ambiguity and restrictive measures.
The legislation prohibits foreign entities from engaging in mining activities within Russia and grants the government authority to impose regional mining bans in areas with fragile energy supplies. Industry experts argue that these restrictions could stifle growth and innovation in Russia’s burgeoning crypto sector.
