Russia has developed a system for screening identities of cryptocurrencies, but considering tax cuts

nRunaway Comment: Russia’s Ministry of Communications and Mass Communications plans to develop a cryptocurrency miners identification system that uses network traffic and power consumption to identify miners. In this regard, the Department of Energy said that technical feasibility does not mean that the economy is feasible, so there may only be industry-scale large nodes. While experts believe that this tracking is difficult to distinguish the power consumption for what purpose, not to mention there are systems that encrypt network traffic. However, the Ministry’s overall plan includes tax concessions for two years, but the Ministry of Finance and the Department of Energy have ruled that the Russian taxation standard is very low and there is no need to provide more concessionsn
nTranslation: Annie_Xun
The Russian government is planning a crypto-mining law that reports “special systems” that detect miners who cryptocurrencies. In addition, the miners may implement two years of tax incentives, including energy consumption targets and special duties.n
Investigate the system of minersn
Last week Vedomosti reported that the Russian Ministry of Communications and Mass Media was developing a system to identify the country’s cryptocurrency miner for tax purposes.n
Report explanation:n
n”Given the current structure of consumption and network traffic, there will be a special system for detecting miners, linking the capacity of mining equipment to that declared by the miners on the cryptocurrency exchange.”n
nAccording to the media, two people familiar with the situation have confirmed the existence of such information in mining regulation prepared by the Ministry of Communications. The bill is expected to be submitted to the State Duma date is February 1.n
This is not the first time that Russia has explored ways to identify miners. Anatoly Aksakov, chairman of the National Duma Financial Markets Commission in October, referred to the possibility of identifying cryptocurrency miners using power consumption.n
Feasibility of this tracking methodn
Ria Novosti reports that DOE believes “is technically feasible, but it must be understood whether such processes and activities are economically viable, and perhaps only the large nodes that provide industrial-scale activities worth monitoring.”n
Experts tell the media that “the main issue is how government agencies detect consumers’ accounts that earn encrypted currencies, not consumers who watch TV at home and heat apartments.”n
n”It’s extremely difficult to track where consumers dig in encrypted currency or download movies in their apartment.”n
nAndrei Koptelov of Center for Economic Research, Synergy University, Russia, explains: “Detecting miners from profiles of electricity consumption and network traffic is hard to come by. Basically, it is not possible to tell whether electricity is being consumed from mines or domestic heating, And private virtual networks allow you to encrypt traffic. “n
Tax incentives, energy consumption targets and special dutiesn
Although the emphasis on cryptocurrency mining will be taxed, RBC reported that the Ministry of Communications considered providing miners with special offers.n
n”Mandatory accounting information disclosure two years miners can get tax cuts, and then have an obligation to pay income tax, but do not pay VAT.”n
nHowever, Ria Novosti reports that Deputy Treasury Secretary Alexei Moiseev told reporters last week that the Ministry of Finance “does not consider it necessary to provide a tax cut for miners.”n
In addition, the Ministry of Communications also plans to provide the “energy consumption targets and special tariffs.”n
Last week, representatives from the Ministry of Energy participated in a meeting organized by the Ministry of Communications to discuss regulation of mining in Russia. The DOE said that “so far no one can explain why” special tariffs must be imposed on miners. The Energy Department news service said: “In the Russian Federation, the current tariffs are the lowest in the world and have given Russia enough attractive computing facilities.”n

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