The Russian crypto mining industry could grow “by between 20% and 40%” in 2024, a new report has claimed.

Per the media outlet Overclockers, the claims came from industry insiders in a report from BitRiver.

The latter is Russia’s biggest crypto mining player. The firm is one of the driving forces behind a recent legislative push that could result in the “legalization” of the sector.

Russian Crypto Mining Industry ‘Continues to Grow’

In the report, analysts claimed that the “low cost of electricity” and “the absence of strict regulation by the authorities” were resulting in “good growth dynamics” for crypto miners.

The report’s authors quoted the director of the Industrial Mining Association, Sergei Bezdelov, as stating that the industrial crypto mining market “doubled in size” in 2023.

BitRiver claims that last year domestic Bitcoin miners accrued a combined total of about BTC 54,000.

The firm said that Russia “continues” to be one of the world’s biggest crypto mining powers.

BitRiver also claimed that “over 95%” of Russian miners’ “computing resources” are being used to mine BTC.

However, not all experts agree on this statistic. The Co-founder of the Encry Foundation, Roman Nekrasov, said he believed BTC accounted for 90% of Russian mining efforts.

He said 10% of Russian miners focus on altcoins like Litecoin (LTC) and Kaspa (KAS).

KAS prices over the past seven days. (Source: CoinMarketCap)

Market Still Largely Unregulated

At present, mining has no legal status in Russia. However, many in Moscow have proposed banning crypto in various forms.

Miners want lawmakers to “hurry up and legalize” their sector, even if that means paying taxes on their earnings.

The Energy Ministry has suggested easing the load on overworked grids by forcing miners to turn off their rigs for a fixed amount of time every year.

The latest legislative proposals reportedly either suggest restricting private mining or allowing energy providers to fine suspected “home” crypto miners.

More selling pressure in the cryptocurrency market is likely on the horizon as Bitcoin miners with large holdings of the digital asset face a sharp drop in revenue, according to researcher Kaiko. https://t.co/rcbyFSdiS2

— Bloomberg (@business) May 13, 2024

Low Power Costs Spark More Growth Potential

Legal experts weighed in. They told the report’s authors that legal provisions for crypto and crypto mining already exist in Russia.

Elizaveta Vikhlyantseva, a lawyer at the law firm Vegas Lex, noted that there was nothing in Russian law that “prohibited” the construction of “crypto mining farms.”

Meanwhile, Yaroslav Shitsla, the head of the IT and IP dispute resolution department at the law firm Rustam Kurmaev and Partners, said that “cryptocurrency has already been recognized as property.”

Shitsla pointed to the law “On Digital Financial Assets” as evidence for this claim. And while this may be true, critics have called this law “lacking in substance.”

The Financial Action Task Force (FATF) appears to agree. It has downgraded Russia’s compliance rating accordingly.

Regardless, experts struck an upbeat note. Nikita Vassev, the founder of Terracrypto, claimed that the rapid growth of mining in Russia was due to the low cost of electricity.

Vassev added that Russia’s “climatic conditions” were also favorable for miners.

As analysts predicted, less efficient Bitcoin miners are powering off under tighter post-halving profit margins. #BTC #Bitcoin #Mininghttps://t.co/DIl0PXO7Ns

— Cryptonews.com (@cryptonews) May 13, 2024

The expert notes that “the majority of miners choose to operate in Siberia because of the opportunity to save on cooling costs.”

Experts added that there were “many production sites” in the country that could “easily be repurposed for Bitcoin mining.”

Most agreed that the “lack of strict control by local regulators” creates “positive conditions for cryptocurrency-related business.”

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