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Russia’s Deputy Minister of Finance revealed that only one-third of crypto mining firms are operating legally despite the new law requiring mining entities to register with the Federal Tax Service (FTS).

Crypto Miners Operating In The Shadows

On Thursday, Russia’s state news agency TASS reported that more than half of crypto mining companies are still operating without registration with the Federal Tax Service. According to the report, Deputy Minister of Finance Ivan Chebeskov stated that only 30% of miners have registered since the new law came into effect in November 2024.

For context, the Russian government approved a law in August of last year to legalize crypto mining in the country. The legislation, enacted on November 1, 2024, aims to combat illegal mining activity and offer exclusive rights to entities registered with the FTS. By December 2024, over 100 mining companies had filed their application.

As reported by Bitcoinist, FTS’s Head Daniil Yegorov revealed that 150 firms had applied for registration just one month after the law was enacted. However, he considered the number was low and expected a larger number of applicants in the coming months.

Seven months later, the number is still low, as only one-third of mining entities have applied to register. Another two-thirds need to come clean and enter the register,” Chebeskov affirmed at the 28th St. Petersburg International Economic Forum (SPIEF).

The Deputy Minister of Finance asserted that the goal was to legalize the mining sector and “bring this industry out of the shadows as much as possible.” He also noted that they have not achieved their objective, adding that the Ministry will work to complete it.

We have not yet completed this process. So far, only 30% of all miners have been entered into the register maintained by the Federal Tax Service, and this process is still far from complete (…) Therefore, we will work to complete this process.

Russian Authorities To Tighten Rules

Notably, the Ministry of Digital Development is reportedly working on adding a new article to the Code of Administrative Offenses (CoAO) to provide fines for illegal mining and failure to provide information about mined crypto.

According to recent reports, the amendment, which is undergoing interdepartmental review, could introduce four types of offenses, three of which will be related to crypto mining.

Additionally, judges would gain the authority to confiscate crypto assets from anyone mining illegally, aiming to stop unregistered operations in Russia. The amendment would also tackle crypto payments, imposing fines on those who transact outside the Central Bank’s Sandbox.

In April, Russian Finance Minister Anton Siluanov announced a plan to establish a dedicated exchange for “highly qualified investors” alongside the Bank of Russia (BOR), aiming to “legalize crypto assets and bring crypto operations out of the shadows.”

Data shows this narrow Bitcoin price range hosts a few key BTC lines, something that could make the range an important support cluster.

$94,000 To $97,900 Range Contains Different Bitcoin Price Models

In a new post on X, CryptoQuant author Axel Adler Jr has talked about where the nearest support cluster lies for Bitcoin. The range in question includes three key levels that have played the role of support in the past.

Two of the lines are moving averages (MAs) of the cryptocurrency’s price: 111-day and 200-day. An MA is a tool that calculates the average of an asset’s value and, as its name suggests, moves alongside it in time, changing its value accordingly.

MAs find their use in studying long-term trends, as they smooth out local fluctuations. They can be taken over any period, be that one minute or one millennium. In the context of the current topic, the relevant periods are 111 days and 200 days.

The third support line of interest is an on-chain metric: the Realized Price of the short-term holders. The Realized Price keeps track of the cost basis of the average investor or address on the Bitcoin network. Here, the version of the indicator that’s of focus is that specifically for the short-term holders.

The short-term holders (STHs) refer to the BTC investors who purchased their coins within the past 155 days. These holders make up for one of the two main divisions of the network done on the basis of holding time, with the other side being known as the long-term holders (LTHs).

When the STH Realized Price is trading below the spot price of the cryptocurrency, it means the recent buyers as a whole are holding a net unrealized profit. On the other hand, the metric being under the asset’s value suggests the cohort is underwater.

Now, here is the chart shared by the analyst that shows the trend in all three of the indicators over the last few years:

As displayed in the above graph, these levels are all packed into a narrow zone at the $94,000 to $97,900 range. Considering the historical interactions that Bitcoin has had with these lines, it’s possible that this tight region could prove to be an important support cushion.

This would only be, of course, if the coin declines enough to retest it in the near future. While its price has recently indeed been going down, it remains some distance above the range for now.

BTC Price

Since the high close to $109,000 at the start of the week, Bitcoin has come down to the $104,300 mark.

South Korea’s central bank has expressed caution over the potential consequences of issuing won-pegged crypto stablecoins, raising concerns that their adoption could inadvertently boost demand for US dollar-backed stablecoins.

Bank of Korea (BOK) Governor Lee Chang-yong warned that such developments may undermine broader monetary policy goals and complicate foreign exchange management.

Stablecoin Policy Clashes with Foreign Exchange Management

Speaking at a press briefing on Wednesday, Governor Lee noted that instead of reducing the influence of dollar-denominated stablecoins, local stablecoin issuance could facilitate their use.

“Issuing won stablecoins may not reduce the use of dollar stablecoins, but rather facilitate the exchange between dollar stablecoins and won stablecoins,” he stated.

According to Lee, this shift could ultimately increase demand for dollar stablecoins, a dynamic that could work against President Lee Jae Myung’s broader agenda of strengthening the role of the Korean won in digital finance.

While President Lee has advocated for the development of KRW-based crypto stablecoins to help reduce capital outflows and build resilience in the digital economy, the BOK’s stance indicates a more cautious approach.

Governor Lee clarified that the central bank is not fundamentally opposed to crypto stablecoins backed by the Korean won but emphasized that a regulatory framework must be in place to manage their impact on financial stability.

He specifically pointed to challenges in foreign exchange oversight and risks to the traditional banking sector. One area of concern involves the shifting of payment and settlement services away from banks toward non-bank entities that would manage stablecoin transactions.

Lee called for a broader discussion on how such a transition might affect bank profitability and the overall structure of the financial industry. “We need to paint the bigger picture on how the banking industry, such as its profitability, [would be affected] in case payment and settlement services move to stablecoins,” he said.

Global Trends and Domestic Considerations

The ongoing debate in South Korea comes amid significant developments in stablecoin regulation internationally. In the United States, the recent passage of the GENIUS Act, which aims to regulate and encourage the use of dollar-pegged stablecoins, has intensified discussions around the role of these digital assets in both domestic and global financial systems.

As of today, crypto stablecoins collectively represent over $260 billion in market capitalization, with more than $253 billion of that in US dollar-pegged tokens, according to CoinGecko data.

The South Korean Ministry of Economy and Finance and the Financial Services Commission are expected to collaborate with the BOK on shaping future stablecoin policy.

Whether the country can deploy a successful KRW stablecoin strategy without escalating dollar reliance remains a central challenge moving forward.

Featured image created with DALL-E, Chart from TradingView