Illegal crypto mining activities are facing crackdowns in Russia, particularly in the bitcoin mining hub where authorities seized 238 mining rigs from a gardening community. The Investigative Committee of the Russian Federation for the Irkutsk Region uncovered the illegal operation with damages exceeding 68 million rubles.
The mining rigs were discovered in the possession of residents of the Angarsky Bereg gardening partnership, a non-profit organization supposedly dedicated to agriculturalists in rural areas. Irkutsk Region, located in Southeastern Siberia, has become a focal point for crypto mining in Russia due to its cheap energy rates and frigid winter temperatures.
Addressing the crypto Mining Issues
However, the surge in mining activities has strained power grids, with illegal miners being held responsible for disruptions. Power companies have accused miners of connecting makeshift equipment to the grid and abusing subsidized residential electricity to power their operations.
The Investigative Committee initiated a criminal case against the miners for fraud-related offenses, alleging they fraudulently obtained discounted electricity rates intended for household use. The case has been forwarded to the local prosecutor's office for further investigation.
Evolution of Russian bitcoin Mining
Energy professionals believe that crypto mining has thrived in Irkutsk since 2019, attributed to China's ban on crypto mining and the region's low electricity tariffs. The illegal miners install equipment in various locations such as houses, apartments, garages, and balconies to evade detection.
Russia recently legalized industrial crypto mining, requiring miners to register with a central regulator and potentially pay higher electricity rates. To manage grid overload, provinces can mandate temporary shutdowns of mining operations.
In a previous crackdown, authorities seized 500 rigs from a similar agricultural community, demonstrating a concerted effort to curtail illegal mining activities in the area. Approximately 90% of Russian crypto miners focus on bitcoin mining.
As Russia grapples with illegal crypto mining activities, authorities are implementing stricter regulations to contain the growing problem and ensure compliance within the sector. With the rise of crypto mining hubs like Irkutsk, the industry faces increasing scrutiny and enforcement measures to maintain regulatory integrity.
