Russian Crypto Miners To Face Jail Time If They Fail To Report Income

The government of Russia is ready to make another move in the cryptocurrency regulations that is going to make things much more difficult for the crypto miners.

The country has been tightening the regulatory leash on the entire cryptocurrency industry. They are determined to increase their pressure against the crypto firms to fully regulate them.

If any firm does not fall in line or tries to breach the laws and regulations, it will have to suffer harsh consequences.

The Russian government has a strict policy against crypto firms that fail to comply with the laws. With the introduction of new regulations, they aim to tighten them even more.

Law Breaching Miners Go to Jail

According to the latest regulations introduced by the Russian government, cryptocurrency miners will be required to report their income to the tax authorities.

They will have to ensure that they pay the taxes they are obligated to pay on their income generated from the crypto mining operations.

If they fail to do it, they will end up facing prison time. According to the sources, the prison sentences will be up to 4 years for the crypto miners or the responsible persons of a crypto firm carrying out mining operations.

Announcement of the New Regulation

Aleksey Moiseev, the Deputy Minister of Russia made the announcement about the implementation of the new regulations in February.

He had announced that they will soon be introducing a new regulation that would impact the crypto miners, obligating them in sharing their taxes.

They will be required by the law to report their income and the taxes paid against the generated income. If they fail to do it, then they will face huge prison sentences.

The cryptocurrency mining firms or the individuals running mining operations will be required by law to ensure the receipts of the digital currencies are arranged. They have to provide these receipts to the Russian tax authorities.

The Russian tax authorities will have issued a unique identifier to each account that is used to interact with the digital assets.

The users will need to provide the crypto transaction receipts to the tax authorities. This way, the tax office will maintain the transaction record of each user.

Severe Punishments

According to the Finance Ministry of Russia, the regulation has been introduced mainly focusing on the mining sector in the cryptocurrency industry.

They have proposed several punishments and sentences involving the companies and the individuals carrying out illegal crypto-mining operations.

As per Russian laws, any firm operating crypto mining businesses and not registering them or not paying taxes on them is considered illegal.

If any minor is caught trying to evade paying taxes on their digital asset earnings and incomes, they will be held accountable. The individuals or the firms will be penalized as well as they will have to face sentences.

The new rules introduced by the Finance Ministry suggest that the crypto miners are given 3-year time to report their incomes and earnings on the mining and digital asset operations.

If they fail to report their taxes and incomes during this period, they will be subjected to multiple punishments. They will be required to pay up a fine of up to 300,000 rubles.

On top of the fine, they will have to face prison time that can be up to 2 years. On top of that, they will end up facing forced labor for up to 2 years.

This means that the total time of confinement would be up to 4 years for the crypto miners marked as criminals.

However, the ministry has clarified that the tax reporting rule would be implemented for the miners generating a specific or a higher amount.

As communicated by the Finance Ministry, the miners will be required to report their income if their crypto mining earnings are 15 million rubles or higher.