Russian authorities are preparing harsh new penalties for illegal cryptocurrency mining, including fines and coin confiscation. The Ministry of Digital Development has drafted legislation to let courts seize digital assets and punish those breaking mining rules.

Fines under the proposal range from 100,000 to 2 million rubles ($1,272-$25,456), with harsher penalties for solo entrepreneurs, officials, and corporations. Repeat or industrial offenders could see their mined crypto taken by the state.

The proposal would also allow punishment for unauthorised participation in mining pools and failure to report operations to the financial intelligence unit, Rosfinmonitoring.

Authorities are also targeting crypto payments made outside the Central Bank's sandbox. Individuals and firms using digital assets for settlements could face fines of up to 1 million rubles ($12,728).

Officials suggest confiscating illegally used crypto will be a strong deterrent, reinforcing the Central Bank's strict stance on digital currency use.

Despite the crackdown, no new regional mining bans have been enacted. A government commission recently rejected proposals to expand mining restrictions in regions such as Khakassia, Buryatia, and Zabaikalsky Krai following the imposition of a year-round ban in part of Irkutsk.