Over 200,000 out of the total 2 million mining machines that relocated from China following government crackdowns back in June headed to Russia according to the latest research released by the Financial Times. This makes Russia the greatest beneficiary of the Chinese mining ousters on top of Kazakhstan 87,849, United States 87,200, and Canada 35,400 mining machines.
Bit Cluster and BitRiver, which are companies based in Russia, received the largest share of mining machines from China after the June crackdowns. This further cements the country’s plans to boost the crypto mining industry and crypto industry ahead of the United States, although Russia is also working on its digital Rubble.
As China prepared to wrap up Bitcoin mining activity, Russian leaderships at the ministries of economic development, energy ministry, and Duma want crypto mining legalized and recognized as entrepreneurship. By making tax law clear, Russia would allow more tax incomes – as much as $4 billion per year – from the industry. As of January this year, anyone who does crypto transactions that garner an income exceeding $7,800 a year in Russia must do tax reporting for the income. In comparison, crypto tax reporting is just starting in the United States following the contested passage and signing of the infrastructure bill into law last week.
Yesterday, the head of the Russian Federal Taxation Service (FTS) Daniil Egorov said that the department is ready to deploy an automated tracking system to prevent situations where cryptocurrency is used for tax evasion and crime. He said the FTS will prioritize stopping crypto tax evasion practices proactively instead of just identifying them after they happen.
Crypto mining, owning, and trading are not outlawed in Russia. Despite crypto being forbidden earlier in the buying of goods and services in the country, President Vladimir Putin, who gazes upon crypto, said they can be used as a means of payment in the country. It may be sooner than later before the country has a legal framework that legalizes and promotes the use of crypto in payment for goods and services.
Despite this, the chair of the Central Bank of Russia Elvira Nabiullina has maintained that the government should not promote cryptocurrencies if they continue to be used for “shadow operations.” There have been mentions of crypto being used in evading international sanctions, as well as hacking and ransomware computer crimes.
Meanwhile, Paraguay and Venezuela close the list of top 5 beneficiaries of the recent hash rate mining location adjustments. The two countries were the greatest recipients of older generation mining machines like the Antiminer S9 machine, whose price fell by as much as 40% following the mining disruptions in China.
In addition to cheap electricity prices, Venezuelans are finding it a great economic activity to mine crypto because of the current economic breakdown. Most of the mining machines relocating to Kazahstan were shipped by Bitfufu and BIT Mining machine manufacturers.