Russia hits crypto farm in ramp up to illegal mining operators

Law enforcement authorities in Russia have closed down a large crypto mining farm that operated outside the law in the middle of Siberia.

The industrial coin minting facility, which occupied almost 30,000 square meters of land, has been targeted amid an ongoing crackdown on illegal mining across the vast country.

Russian court bans Bitcoin farm plugged into the power grid without permit

A court in Russia’s Krasnoyarsk Krai has stopped the illegal mining of cryptocurrencies for millions of rubles a month, the region’s prosecutor’s office announced. The large coin-producing operation was set up in the city of Nazarovo.

The unusual facility, which minted crypto in open air and behind a barbed wire fence, attracted the attention of the local community, RBC Crypto reported on Monday, quoting a press release which was also published on Telegram.

Regional authorities said the property was registered as a non-residential building on an industrial site with a total area of 29,800 square meters. However, law enforcement officials established that the land plot had been repurposed.

Prosecutors explained:

“In reality, the territory is occupied by transformers, power plants, mobile centers and other equipment that was leased, together with a non-existent building, to another organization for 4.6 million rubles (nearly $60,000) a month.”

The operator of the illegal mining farm connected the hardware to the city’s power grid without obtaining the proper permits and rights to use the state-owned land. Inspectors also reported violations of fire safety regulations, the article detailed.

Initially, the prosecutor’s office demanded that the miner address the registered violations, but their request was ignored. Eventually, a lawsuit was filed, which resulted in the ban of mining operations at the site until these are eliminated.

Russia cracks down on illegal cryptocurrency miners

Crypto mining in the Russian Federation, which was legalized last year, has been blamed by local authorities across the country for causing excessive load on power distribution networks, resulting in breakdowns and blackouts.

Their concerns have led to seasonal and permanent restrictions on the energy-intensive activity in many parts of the country. But while a blanket ban on mining has already affected almost a dozen Russian regions, a report earlier in June indicated that Moscow is halting its expansion.

Citing a drop in tax revenues and decreasing electricity sales, the federal government now wants to shift its focus to targeting illegal mining farms rather than all mining firms. Recently announced legislative changes seek to punish the so-called “gray” miners with hefty fines and crypto confiscation.

Back in February of this year, the authorities in Krasnoyarsk Krai, one of the most popular mining destinations in Russia, charged an employee of a local utility with taking 600,000 rubles in bribes to cover up the activities of illegal miners who caused damages exceeding 9 million rubles.

This month, engineers from the local energy distributing company in the Russian republic of Buryatia discovered 95 mining rigs hidden in the back of a truck. The improvised mobile mining farm was connected to the power lines supplying electricity to a village in the Pribaikalsky district.

This week, police in Ingushetia announced they have detained a man who stole 2.34 million rubles’ worth of electricity to power 65 coin-minting devices illegally tapped into the grid. The mining installation, found in a utility room, had been connected to a substation, bypassing electricity meters.

The North Caucasian republic is among the Russian regions where cryptocurrency mining has been completely prohibited until the spring of 2031. The list includes territories from the Far East to the Russia-occupied oblasts of Ukraine.

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