In a significant regulatory move, **Russia has banned cryptocurrency mining in Moscow**, the surrounding Moscow Region, and parts of Kursk, effective until **December 31, 2032**. The government decree No. 936, signed on July 25 and published on July 31, also prohibits participation in crypto mining pools in these areas.

This decision comes as Russia's Energy Ministry seeks to **mitigate power-capacity shortages** caused by energy-intensive mining facilities straining regional grids. Currently, mining consumes approximately **1 gigawatt** in the Moscow power system, and data-center capacity could reach **3.6 GW**, or 17% of peak demand, by 2032.

## Russia's Role in Global Bitcoin Mining

Russia is the **world's second-largest Bitcoin mining power**, accounting for an estimated **175 exahashes per second**, or **16.4% of Bitcoin's global computing power** in Q1, according to Luxor's Hashrate Index. The U.S. leads with a larger share, but Russia's position is significant.

The ban in Moscow and surrounding areas raises questions about the impact on Russia's overall hashrate, though it's unclear how much capacity is located in the newly restricted regions.

## Mining, Sanctions, and Crypto Payments

Russia's mining industry is intertwined with its response to **Western sanctions**. Russian companies have been using **domestically mined bitcoin** for international payments, as legal changes in December 2024 allowed this to counter sanctions. The U.S. Treasury sanctioned BitRiver and its subsidiaries in 2022, alleging that Russian mining helped monetize energy resources and offset sanctions' impact.

Despite the ban in certain regions, Russia's parliament passed legislation in July maintaining the ban on domestic crypto payments but preserving exceptions for foreign-trade settlements and mined cryptocurrency transactions.

## Broader Regulatory Context

Russia legalized registered crypto mining in 2024, but has since imposed restrictions in multiple regions citing electricity demand. Earlier bans covered 10 regions through March 2031, with year-round restrictions later extended to southern Irkutsk, most of Buryatia, and Zabaykalsky Krai.

This latest ban in Moscow marks a significant tightening, reflecting the tension between fostering a crypto mining industry and managing energy resources.

## What's Next?

The ban could push miners to relocate to other regions or countries, potentially impacting Russia's hashrate and global mining distribution. It also highlights the **complex interplay between energy policy, sanctions, and cryptocurrency adoption**.

The Energy Ministry enacted the year-round restriction to mitigate power-capacity shortages as energy-intensive mining facilities continue to strain regional grids.

Russia's Capital Bans Bitcoin Mining: What It Means for the Global Hashrate

In a major development for the crypto space, **Patrick Witt**, executive director of the President's Council of Advisors for Digital Assets, announced at **CoinDesk's Consensus Miami conference** that an update on the long-anticipated **U.S. Strategic Bitcoin Reserve (SBR)** is coming "in the next few weeks."

The federal effort to inventory, centralize, and secure U.S.-held bitcoin and other digital assets has been running behind the scenes for months. Following President Trump's executive order, the White House halted what Witt called "fire sale" liquidations under the previous administration and began auditing crypto holdings across agencies.

**Shocking revelations** emerged during this process: "We've heard stories and confirmed some of them of cold wallets that were being stored in drawers of desks in various agencies," Witt revealed.

A **recent exploit** involving assets held by the U.S. Marshals Service served as a wake-up call. Bloomberg reported in January that the Marshals Service was investigating a possible hack, with on-chain investigator ZachXBT claiming a hacker stole over $60 million, including funds from government seizure wallets. Witt cited this as proof that federal crypto holdings need proper safeguarding.

"It's a case in point for why it was so necessary that the president established the SBR, and that he instructed the agencies to take these assets very seriously and properly safeguard them," Witt said. "Custody is unique for digital assets."

While Witt declined to disclose the size of federal crypto holdings, he emphasized that the priority is to "get our own house in order" before discussing details. He suggested the upcoming announcement would address open questions on size and structure.

Importantly, the reserve will **not automatically absorb every newly seized asset**. Crypto from active legal proceedings will remain in pending status until forfeiture is finalized, with potential restitution to victims before being moved to the reserve or a separate stockpile for other crypto assets.

**Legislative backing** is still needed. Witt cited Sen. Cynthia Lummis's **BITCOIN Act** in the Senate and Rep. Nick Begich's **American Reserves Modernization Act** in the House as key bills to codify the reserve. "It always needs to be followed up with proper legislation," he said.

The likely need for a legislative underpinning remains a major constraint, and it's unclear when Congress will find the bandwidth to push through a reserve bill.

White House digital-assets adviser Patrick Witt cited a recent exploit involving assets held by the U.S. Marshals as proof federal crypto holdings need safeguarding.

White House Drops Bombshell: US Bitcoin Reserve Update Coming in 'Next Few Weeks'

## SEC's New Framework for Crypto Regulation

Securities and Exchange Commission Chair **Paul Atkins** is spearheading an effort to create a **"token taxonomy"** that aims to clearly delineate which cryptocurrencies should be classified as securities. This initiative represents a significant shift in the agency's approach to regulating digital assets.

![SEC Chair Paul Atkins](https://stat.theblock.co/cdn-cgi/image/format=webp,q=50/wp/uploads/2025/01/20250109_Paul-Atkins_News_2-1200x675.jpg)

### Rooted in the Howey Test

In prepared remarks at the Federal Reserve Bank of Philadelphia's Fintech Conference, Atkins detailed that this taxonomy will be **anchored in the Howey Test** - the longstanding legal framework derived from a 1946 U.S. Supreme Court case that determines whether an asset qualifies as an investment contract and thus a security.

"In the coming months, I anticipate that the Commission will consider establishing a token taxonomy that is anchored in the longstanding Howey investment contract securities analysis," Atkins stated, emphasizing that this approach recognizes "limiting principles to our laws and regulations."

### Evolving Nature of Crypto Assets

A crucial aspect of Atkins' announcement was the recognition that **cryptocurrencies can evolve** beyond their initial classification. "Networks mature. Code is shipped. Control disperses. The issuer's role diminishes or disappears," he explained. "At some point, purchasers are no longer relying on the issuer's essential managerial efforts, and most tokens now trade without any reasonable expectation that a particular team is still at the helm."

## Not a Promise of Lax Enforcement

### Continued Regulatory Vigilance

Atkins made it clear that this new framework **does not signal reduced enforcement**. "Now, let me be clear about what this framework is not. It is not a promise of lax enforcement at the SEC," he asserted. "Fraud is fraud."

The SEC chair reiterated that **tokenized securities** - traditional assets like stocks converted into tokens on blockchain - would still be considered securities under the agency's purview.

### Project Crypto and Regulatory Updates

Under the Trump administration, the SEC has taken a markedly different approach compared to the Biden era. With Atkins now leading, the agency has launched **"Project Crypto"** to update rules and regulations around digital assets. This includes potential exemptions and new trading frameworks.

"I have asked Commission staff to prepare recommendations for the Commission to consider that would allow tokens tied to an investment contract to trade on non-SEC regulated platforms," Atkins revealed, mentioning potential registration through the CFTC or state regulatory regimes.

## Complementing Congressional Efforts

### Alignment with Legislation

Atkins emphasized that the SEC's work aims to **complement, not replace**, ongoing Congressional efforts to regulate the crypto industry. Multiple versions of crypto market structure bills are currently moving through Congress, with the House having passed its version and the Senate considering two different drafts.

"What I envision aligns with legislation currently being considered by Congress and aims to complement, not replace, Congress's critical work," Atkins said, noting that he and Commissioner Hester Peirce have made supporting Congressional efforts a priority.

### Future Exemptions and Super-Apps

The SEC chair also discussed potential **exemptions for crypto assets** and his vision for "super-apps" that could allow trading and custody of multiple assets under a single regulatory license. "I hope that the Commission will also consider a package of exemptions to create a tailored offering regime for crypto assets that are part of or subject to an investment contract," he added.

SEC Chair Atkins is spearheading an effort to create a "token taxonomy" that looks to delineate between what crypto would be securities