Data Collection Concerns
Russian Bitcoin miners are unhappy with the new government registry that demands they reveal sensitive information, such as wallet addresses, due to newly established laws. Such a move threatens to expose miners to international sanctions in case there is a data leak.
According to Anton Gorelkin, a Russian lawmaker overseeing information policy, if data from the registry were to be leaked, that would be a “big gift to our geopolitical opponents.”
Government’s Crypto Miner Registry
The national registry for crypto miners began functioning in November 2024, and it was controlled by the Federal Tax Service of Russia. According to Daniil Yegorov, the head of the tax agency, about 150 miners had applied for their registration in the first three weeks.
However, many miners view the idea of storing information within a government database as risky.
Growing Concerns Over Data Leaks
On Feb. 7, Gorelkin answered miners’ questions via Telegram about a potential breach that might expose crypto miners to possible sanctions. He said the tax agency assured him the data was stored in a “separate internal protected system.” But cybersecurity experts say no system is completely breach-proof.
Roskomnadzor, Russia’s communications watchdog, recorded 135 data breaches in 2024, which leaked more than 710 million records. The Russian State Duma increased the fines for data breaches from a maximum of 100,000 rubles, about $1,000, to 15 million rubles, about $150,000.
Sanctions and Crypto Mining in Russia
While the sector of crypto mining in Russia as such is not under sanctions, some companies do face penalties for their activities: In April 2022, the U.S. Department of the Treasury’s Office of Foreign Assets Control placed sanctions on the Swiss-based holding company BitRiver AG, and its subsidiaries had operations in Russia. More recently, in March 2024, OFAC targeted 13 Russian entities that included fintech firms like B-Crypto, Masterchain, Laitkhaus, and Atomaiz for allegedly aiding sanctions evasion by facilitating crypto-related services.
Future Risks and Uncertainty
As the world is becoming increasingly critical of Russia, with growing cybersecurity threats, Russian Bitcoin miners are on tenterhooks. While officials claim that the data is secure, the industry fears that even a single leak could have severe consequences, further complicating the regulatory landscape for crypto mining in Russia.
