According to Kommersant’s poll of industry leaders, Russian mining farms had a capacity exceeding 500 megawatts (MW) by 2022. They are poised for continued growth in the context of the recovery of the crypto market. However, the expansion could be limited by the electricity tariffs or taxes for miners.

Bitriver is the leader of the group and has eight crypto mining sites that have a combined rating in excess of 300 MW. Ural Mining Company (UMC), has 88 MW of power. Bitcluster has three 60-megawatt farms. EMCD has 50 MW of data center in four locations. BWCUG only has one at 20 MW.

The Russian Federation is a popular mining destination due to its abundant energy resources and cooling climate. The industry has been affected by the conflict with the West over Ukraine’s war. sanctions have placed restrictions on Russia’s mining potential to prevent it from using cryptocurrencies to bypass financial restrictions.

However, the consequences of sanctions and the state-of-the crypto economy had different impacts on the Russian mining companies’ business. Bitriver, which was specifically targeted by U.S. Sanctions, actually doubled its number of data centers and its available capacity, realizing large-scale projects throughout Russia, Igor Runets, the founder of Bitriver told Kommersant.

BWCUG has also reduced its mining capacity. According to the company, new clients in North America and Europe are reluctant to use Russian facilities despite their lower costs. Operator also pointed out the uncertain prospects for crypto-mining in terms of legislation. A bill to regulate Russian mining was presented to parliament in November, but has yet to be approved.

Alisa Tsukanova (EMCD’s marketing director) noted that the government could introduce special electricity tariffs or taxes for coin minting businesses to reduce the profitability of the mining industry. Anatoly Aksakov, Chairman of State Duma Committee on Financial Market, spoke to Izvestia about two options. One, he suggested a tax on profits of 20% or a single tax on imputed earnings.

After a study in October 2017, it was revealed that Russian bitcoin mining revenue grew 18x in just four years, before falling sharply in the second quarter 2022. A second piece of research was published in August and showed that Russian miners have increased their electricity consumption 20 times since 2017.