Russia busts illicit coin minting operations in Kemerovo

Russian authorities have unplugged several crypto farms that were mining on stolen electricity, causing financial damages of up to millions of rubles.

The installations have been disconnected from the grid in Kuzbass, another region covered by an intensifying crackdown on illegal mining activities.

Russia busts illicit coin minting operations in Kemerovo

Employees of the utility company in Kemerovo Oblast in southwestern Siberia, also known as the Kuzbass region, have carried out multiple raids against law-breaking crypto miners this week, Russian media reported.

Aided by law enforcement, they found three illegal mining facilities. In one of the cases, the hardware was installed in an old hangar. In the other two, the energy-hungry equipment was placed in trailers.

According to the preliminary estimates of Rosseti Siberia, financial losses incurred by the power distribution company as a result of its activities amount to a total of 21.7 million rubles (almost $275,000).

The improvised installations were discovered in the urban settlement of Promyshlennaya, the village of Tebenkovka, and Panfilovsky District of the oblast, the utility detailed in a press release, quoted by the Interfax news agency.

The crypto farm in Promyshlennaya, the one hosted in the abandoned hangar, had 91 mining rigs with a combined capacity of over 335 kW, which burned 5 million rubles worth of electricity.

The miners who ran the installation in Tebenkovka had installed 39 devices near a transformer substation and connected their equipment to it. Damages there reached 11.8 million rubles.

The third facility had 40 mining machines put in a metal trailer right outside Panfilovo. The unknown operators installed their own transformer and disguised it as an original one to tap into the power line and steal 5 million rubles’ worth of electrical energy.

All discovered mining equipment has been sized with the help of police officers and representatives of the Federal Security Service (FSB), the local news outlet Prokuzbass.ru noted in a report on Thursday.

The law enforcement agencies are now working to identify the persons who organized and managed the profitable mining operations.

Russian authorities step up crackdown on crypto mining

Joint raids like these are becoming a common occurrence in many Russian regions experiencing a boom of illicit crypto mining activities.

Days ago, officials in the western Russian exclave of Kaliningrad, on the other end of the vast country, dismantled a crypto farm which used 56 million rubles (almost $700,000) of unpaid electricity to power its 300 mining units.

And the tools employed by the Russian authorities to discover the mining installations are becoming more sophisticated, as reported by Cryptopolitan.

Local subsidiaries of the national grid operator Rosseti have been monitoring consumption, tracking internet traffic, and collecting data from smart electricity meters to pinpoint their locations.

Earlier in November, energy workers in the Republic of Dagestan flew a drone equipped with a thermal vision camera to catch a fugitive mining farm installed in the back of a van.

The Russian Federation legalized the mining of digital currencies in 2024, making it the first relatively regulated crypto-related activity in its economy.

However, since then, it has also banned mining, either temporarily or permanently, in around a dozen regions, in different corners of the country, facing electricity shortages due to the booming mining sector. In some cases, the prohibition will remain in place until the spring of 2031.

Both legitimate and illegal miners have been blamed for the energy deficits, as low electricity rates in certain parts of the country have led to a growing concentration of mining enterprises.

To mine legally, Russian companies and individual entrepreneurs need to register with the Federal Tax Service (FNS) both their businesses and their mining equipment. Less than a third of known active mining enterprises have done so, according to official estimates.

The registration is not mandatory for non-professional miners who use less than 6,000 kWh of electricity monthly. Many have tried to maintain their consumption below that threshold by illegally connecting to the grid.

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