Russia: Illegal Crypto Miners Cost Taxpayers Dearly
The broadcaster reported that the fear of facing high taxes on their income and paying prohibitively high electricity costs is “driving many miners into the shadows.”
Ren TV explained: “The annual budget losses from underground mining amount to billions of rubles.”
Despite recent efforts to legalize the Russian crypto mining sector, so-called “gray-hat mining” has “become Russia’s newest epidemic,” the broadcaster continued.
Moscow has ordered all industrial miners to report their operations, earnings, and energy usage data to the Federal Tax Service.
In exchange, they have been granted legal “entrepreneurship” status, which allows big investors like banks to provide financing and investment.
However, while this is attractive to the country’s biggest players – the likes of BitRiver and Intelion – smaller-scale miners are less keen.
The outlet explained that in their quest to save money, crypto miners now “resort to fraud, deception, or under-the-table deals with energy companies.”
This means that in many cases, ordinary household and commercial consumers “are forced to pay for crypto miners’ operations.”
Southern Russia, the traditional stronghold of the Russian Bitcoin mining industry, has become Russia’s “Mecca of gray-hat mining,” the outlet explained.
‘Number of Illegal Crypto Mining Farms Rising by the Day’
Ren TV reported that experts believe that there are almost 140,000 Bitcoin and altcoin mining farms operating in Russia. They also think this number is “growing constantly.”
But power chiefs say that “the lion’s share” of crypto miners have not declared their operations and “remain underground.”
Experts added that buying electricity at commercial and industrial rates “eats up to 80% of crypto miners’ profits.” Their response is often to “cut costs illegally.”
Police have recently reported the arrest of an employee at the Omsk Thermal Power Plant who took a 500,000 ruble ($6,270) bribe to let local crypto miners steal power from the grid.
