Authorities in Russia continue to crack down on illegal crypto mining activities, particularly in the Irkutsk Region, which has become known as the unofficial Bitcoin mining capital of the country. In a recent raid on a gardening community in Priangarye, the Investigative Committee of the Russian Federation confiscated 238 mining rigs, valued at over $758,000. The miners, who were allegedly causing damages to the tune of millions of rubles, were connected to the Angarsky Bereg gardening partnership, a non-profit organization of agriculturalists in rural areas. Irkutsk Region has become a hotspot for crypto mining due to its low energy rates and cold temperatures, but miners have been accused of overloading power grids and misusing subsidized electricity.

Power companies in Irkutsk blame illegal miners for disruptions to the power grid, as many individuals are connecting makeshift equipment to the grid using subsidized electricity intended for residential use. The authorities have launched a criminal case against the miners, charging them with fraud-related offenses for paying for electricity at discounted rates meant for household use. The case has been handed over to the local prosecutor’s office for further investigation. Cryptocurrency mining has been prevalent in Irkutsk since 2019, with the ban on mining in China and low electricity tariffs making the region attractive to miners. The majority of miners operate illegally, installing equipment in various locations such as houses, apartments, garages, and balconies.

As of September 1, industrial crypto mining is legal in Russia, as the country seeks avenues to bypass US and EU-led sanctions. However, miners must register their operations with a central regulator and may face higher electricity rates. Provinces also have the authority to temporarily shut down mining operations when grids are overloaded. In recent months, authorities in Irkutsk have seized hundreds of mining rigs from illegal miners, with charges pressed against suspects. Experts estimate that around 90% of Russian crypto miners focus their efforts on Bitcoin mining. The crackdown on illegal mining activities in Irkutsk and other regions of Russia is part of the government’s efforts to regulate the cryptocurrency industry and reduce disruptions to the energy grid caused by unauthorized mining operations.

The rise of Irkutsk as a prominent crypto mining hub in Russia can be attributed to the ban on mining in China and the region’s competitive electricity tariffs. The influx of miners has led to concerns over power grid overloading and misuse of subsidized electricity, prompting authorities to take action against illegal mining activities. With the legalization of industrial crypto mining in Russia, miners are required to comply with regulations and register their operations with the government. Failure to do so may result in penalties or shutdowns of mining rigs in cases of grid overload. The ongoing crackdown on illegal mining activities reflects the Russian government’s commitment to regulating the cryptocurrency industry and ensuring compliance with energy consumption regulations. The recent raids on mining operations in Irkutsk highlight the challenges faced by authorities in managing the growing crypto mining sector in the country.

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