Authorities and power utilities in various regions across Russia have shut down illegal cryptocurrency mining farms, seizing hardware and taking operators to court. This crackdown on underground crypto mining comes amid discussions on a proposal to introduce criminal liability for miners breaking upcoming legislation for the industry.
Police and power suppliers have uncovered and dismantled illegal mining installations in Siberia and Southern Russia, according to local crypto news outlets. In one case, the organizers of a mining enterprise have been charged with stealing large amounts of electricity.
Employees of Rosseti North Caucasus found a fairly large improvised mining farm in Shpakovsky district of the Stavropol Krai, where they confiscated 66 ASIC miners. A resident of the village of Nadezhda, who placed the equipment in his house and connected it to the grid, may now face criminal liability for running the underground facility. Power engineers have estimated that it burned 954,000 kWh of electricity for over 6 million rubles ($78,000).
A similar installation was discovered in the attic of a school in the town of Shelekhov, Irkutsk Oblast, where police seized 25 mining units. Such cases are quite common in the Siberian region, where many people mine in basements, garages, and dachas, trying to make a profit using subsidized electricity in residential areas.
According to a report in February, over 1,000 lawsuits have been filed against at-home crypto miners in Irkutsk. This week, the Prosecutor’s Office of Tomsk, another Siberian oblast, announced it has approved the indictment in a criminal case against seven local residents who organized to illegally connect several premises with crypto mining equipment to the grid. They are accused of causing damages to the power supplier for an estimated 24 million rubles (over $310,000).
The latest examples of Russian authorities clamping down on unauthorized mining come as lawmakers and government officials are preparing to resubmit a revised bill designed to regulate the activity. Amendments introducing criminal liability and harsh penalties for so-called “grey” miners who evade taxation have sparked reactions from the crypto industry.
Many believe that the government’s crackdown on illegal crypto mining is an indication that it is getting ready to implement tighter regulation on the industry as a whole. Some analysts predict that the government will continue to shut down illegal mining farms and institute tighter regulations on cryptocurrency mining in the months to come.
According to Alexander Zhuravlev, the CEO of a Russian hardware startup called Whales Wealth, mining in Russia is “still ripe for significant growth,” but under-regulation continues to pose a serious threat to the industry. Zhuravlev noted that many miners have been able to operate in the country without any legal oversight or regulation, which has led to a proliferation of illegal mining operations.
Despite the potential risks posed by illegal mining, some experts believe that the Russian government should focus on creating a more favorable regulatory environment that encourages legitimate mining operations. This would allow the country to capitalize on its abundant supply of cheap electricity and the booming global demand for cryptocurrencies.
In conclusion, the recent crackdown on illegal crypto mining in Russia is an indication that the government is serious about tightening regulations on the industry. While many miners have operated without any legal oversight for years, it seems that those days are numbered. As such, it is likely that we will continue to see more enforcement actions against illegal mining operations in the months to come. Nevertheless, it remains to be seen how successful the government’s efforts to regulate the industry will be and whether they will lead to the growth or decline of the Russian mining sector.
