Russian Crypto Mining Efforts Suffer Setback as Police Shut Down Illegal Data Centers
Russian crypto mining faced a setback as police closed two large, illegal data centers in Siberia and the republic of Dagestan. In Novosibirsk Oblast, officers raided a disused boiler house and found an “illegal connection” to the power grid, along with over 100 operational ASIC devices used for mining cryptocurrencies. The power provider estimated that the damage caused by the illegal miners amounted to several million rubles. In Dagestan, ministry officials discovered an illegal mining farm in an abandoned brick factory. Police disconnected 300 devices used for cryptocurrency mining and found components and software for mining coins.
Russian Crypto Mining Still in Regulatory ‘Grey Zone’
Crypto mining in Russia remains in a regulatory grey zone as there is no legal status for mining activities. Despite having the second-largest collective mining capacity after the US, Russian miners are still waiting for lawmakers to pass a bill recognizing mining as a form of entrepreneurship. Industrial giants like BitRiver have been urging Moscow to legalize the industry for years. Until then, the entire Russian crypto sector will continue to operate in this legal limbo.
Dagestan Witnessing Rise in Crypto Mining Activities
In Dagestan’s Kizilyurt District, ministry officials discovered an illegal mining farm in an abandoned brick factory following reports of illegal electricity consumption. The farm housed over 300 cryptocurrency mining devices on metal racks. Police disconnected the devices and found components and software used for mining coins. The masterminds behind the farm installed the equipment between July and September 2023, bypassing electricity meters and connecting to a local power line. The miners were responsible for damages worth almost $18,700, and an ongoing investigation is underway.
Could Russia Become a Crypto Mining Global Leader?
Russian industrial miners have expressed their displeasure at government plans to raise electricity tariffs, as they believe it will hinder the growth of the Russian crypto mining industry. Energy ministry officials argue that higher tariffs will discourage miners from setting up in areas with overloaded grids. However, industry leaders believe that Russia has the potential to become a global leader in crypto mining and that this move would impede its progress.
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