Russia: Authorities Intensify Action Against Illegal Cryptocurrency Mining, Confiscating 238 Devices

The crackdown on illegal cryptocurrency mining in Russia persists in its unofficial Bitcoin (BTC) mining hub, with authorities confiscating 238 mining rigs from a community that claims to be focused on gardening.

The state media agency TASS reported that the Investigative Committee of the Russian Federation conducted a raid in a “summer cottage village” located in Priangarye.

Is Russia Facing an Illegal Crypto Mining Issue?

Officials stated they confiscated “238 units of mining equipment.” They also asserted that the unauthorized miners had inflicted “damages amounting to over 68 million rubles [$758,000].”

The Committee indicated that the mining rigs were “in the possession of” members of the Angarsky Bereg gardening partnership.

This partnership is a non-profit entity that is purportedly made up of agricultural workers operating in rural regions.

The Irkutsk Region (Oblast) is situated in Southeastern Siberia and has recently emerged as the unofficial center of the Russian crypto mining industry.

This development is primarily attributed to its notoriously low energy costs and frigid winter temperatures.

However, in recent months, miners have been accused of overloading electrical grids, leading to significant disruptions.

Power companies assert that illegal miners, who connect to the grid using improvised equipment, are largely responsible.

They also allege that many individuals are utilizing subsidized electricity meant for residential purposes to operate their mining rigs.

The committee announced that it had initiated a “criminal case” against the miners, accusing them of fraud-related crimes.

Officials stated that the miners “paid for electricity at a reduced rate” designated “for household needs.” The committee has forwarded the case to the local prosecutor’s office.

A local landmark in Irkutsk, Russia. (Source: Sergio Tittarini [CC BY 2.0])

The Emergence of a Russian BTC Mining Center

TASS reports that energy experts believe crypto mining “has been extensively conducted in Irkutsk since 2019.”

They asserted that the growth of Irkutsk as a mining hub was primarily “due to a ban on cryptocurrency mining in China” and “the lowest electricity rates for residents in the country.”

Officials noted that the majority of miners “are operating illegally,” adding that they generally “install equipment in homes, apartments, garages, summer cottages, and balconies.”

As of September 1, industrial crypto mining has become legal in Russia as the country seeks ways to navigate US and EU-imposed sanctions.

However, miners are required to register their operations with a central authority.

Pro-Russian bloggers say Moscow’s forces push into two eastern Ukrainian cities https://t.co/VIKiYhjS3r pic.twitter.com/79rct5DYmJ

— Reuters (@Reuters) September 2, 2024

They may also face the requirement to pay higher electricity costs. Additionally, regions now have the authority to temporarily compel miners to shut down their rigs during periods of grid overload.

In July, authorities in Irkutsk confiscated 500 rigs from a similar agricultural community, with prosecutors filing charges against another suspected illegal miner in May.

Experts estimate that at least 90% of Russian crypto miners concentrate their activities on Bitcoin.

The post Russia: Illegal Crypto Mining Crackdown Intensifies as Officials Seize 238 Rigs appeared first on Cryptonews.