To Mine or Not to Mine, Russia’s Regulations Still Unclear

Russia recently announced its plans to assign a legal status to Bitcoin. While the cryptocurrency community rejoiced about the new developments, it is too soon to break out the champagne as Bitcoin mining can still be considered as a criminal offense, attracting jail time. Many people became aware of the scenario after the head of Russian Central Bank’s cryptocurrency working group explained about it during a recent speech.

According to one of the Russian cryptocurrency news outlets, Central Bank’s Elina Sidorenko, while speaking at the Blockchain Bitcoin Conference Russia clarified that the country is currently working on creating cryptocurrency friendly regulations, which will also be applicable cryptocurrency mining activities. Meanwhile, Bitcoin mining continues to be perfectly legal, but the same can’t be said about selling the mined Bitcoin.

Sidorenko explained that mining Bitcoin while paying for any incurred overhead charges in legal, as the miner would be utilizing the resources for which he/she has paid for. But if a miner tries to sell the bitcoins earned during the process of mining, he/she will end up violating multiple laws. In order to sell the “legally mined” Bitcoin, a miner will have to create a company with relevant exchange licenses, which is, unfortunately, impossible in accordance with the existing corporate laws.

The publication quotes Sidorenko comparing mining with general habits and other activities by saying,

“You may brush your teeth, do pushups, or not brush your teeth but tell everyone you do. As long as you don’t sell your clean teeth and don’t sell the mined money it’s totally up to you. As long as you don’t import products into the exchange zones or the economy, you’re as clean as a whistle. They ask us what we’re going to do with companies that mine money. The answer is simple: the same what we do with companies knitting socks.”

By legalizing Bitcoin, Russia intends to put an end to potential money laundering activities involving cryptocurrencies. It will also enable the country to include virtual currencies in the tax net, generating more revenue for the government.

In the coming days, Russians can expect changes in the country’s corporate, tax and finance-related laws to facilitate the inclusion of cryptocurrencies as recognized currencies in the region. Whether the miners’ find a solution for their predicament in these new laws, is something that has to be seen in the future.

Ref: Forklog | Image: NewsBTC