Mining in Russia is legal as long as miners pay their taxes and electricity bills. However, not everyone is willing to comply with these simple rules. Recently, Russian authorities and electricity companies have closed illegal mining operations across the country in a crackdown on mining farms, confiscating equipment and prosecuting its operators. Discussions are currently held on how to make miners criminally liable for violating the upcoming legislation for the crypto industry.
Illegal mining farms shut down across Russia
Police and energy suppliers have discovered and closed illegal mining operations in Siberia and the south of Russia. In one case, underground miners have been charged with stealing significant amounts of electricity.
Rosseti North Caucasus have discovered a large at-home mining farm in Shpakovsky district, Stavropol Krai. According to the local energy company, the company’s representatives and local police seized 66 ASIC (application-specific integrated circuit) miners.
A man who installed mining equipment at home and linked it to the power grid in the Nadezhda village may now be prosecuted for operating an illegal farm. According to power engineers, his equipment consumed 954,000 kWh of electricity for a total cost of 78 thousand US dollars (more than 6 million rubles).
Police also discovered a similar farm in a school attic in the town of Shelekhov, Irkutsk Region. They received a complaint from the local electricity company about unusually high electricity use and noise coming from the roof of the school. Police confiscated 25 mining units used by the school’s electrician and his IT-savvy friend.
Such incidents are rather typical in Siberia, which is known for its cheap electricity. A mining boom has been happening there. Many local residents organize mining farms in their basements, garages and country houses, trying to make a profit by using subsidized electricity. According to a report, in February alone, authorities in the Irkutsk Region filed at least 1,000 lawsuits against consumers illegally mining crypto at home.
Legal precedents
This week, the Prosecutor’s Office of the Tomsk Region in Siberia announced the approval of the indictment in a criminal case against seven local miners. They connected several premises with mining equipment to the power grid. According to the power supplier, they have incurred damages in the amount of around 310 thousand US dollars (24 million rubles).
Legislators and government representatives are preparing a revised bill aimed at controlling mining activities. Amendments introducing criminal liability and severe penalties for illegal miners who evade taxes are already being considered. The bill is designed to regulate mining in Russia and introduce harsh penalties for miners who do not report digital assets to the authorities. In its latest version, the bill also suggests penalties, including imprisonment and hefty fines, for those who organize illegal crypto trade.
