Authorities in Russia and Ukraine have shut down several illegal crypto mining operations that were allegedly powered by stolen electricity. Underground farms have been discovered in and around the Ukrainian and Russian capital cities of Kyiv and Moscow, as well as in the Russian republic of Dagestan.
Russia seizes illegal mining farms in Moscow and Dagestan.
Russian law enforcement and customs agents recently discovered a large amount of electricity stolen from the Rosseti network in Moscow Oblast, the region adjacent to Russia’s capital. This week, Tass reported on the operation, citing Ekaterina Korotkova of the Moscow Interregional Transport Prosecutor’s Office. The official elaborated:
An audit revealed an unauthorized connection to the power grid, electricity theft, and illegal seizure of land for the operation of equipment designed to perform cryptographic calculations related to digital currency mining.
The cost of illegally consumed electricity used to power the mining hardware exceeds 500,000 rubles per day (nearly $7,000), according to Korotkova. Authorities have opened a criminal investigation and intend to prosecute the coin minting facility’s owners.
Two cryptocurrency farms were also discovered in Dagestan, a Russian republic in the North Caucasus. The Komsomolskaya Pravda newspaper reported in late November that a large mining operation had been discovered in a mountainous region. According to preliminary investigation data, its unknown operators have caused an estimated 1 million rubles (over $13,000) in damages.
Local police have also discovered a mining enterprise in Botlikh district where miners were illegally connected to the grid. The crypto farm had been operating since November and was run by a 35-year-old Dakhadayevsky district resident who stole power worth 257,000 rubles (approximately $3,500).
The Russian Federation’s law “On Digital Financial Assets,” which went into effect in January, regulated some crypto-related activities, but cryptocurrency mining, among others, is not one of them. This year, officials in Moscow have been calling for the business to be recognized as an entrepreneurial activity and taxed accordingly.
Underground Crypto Farm Discovered in Ukraine’s Kyiv Region
Meanwhile, the Ukrainian Security Service (SBU) announced on Friday that it had discovered an illegal mining facility in Kyiv Oblast. Three local residents, according to Ukraine’s main law enforcement agency, installed a number of ASICs in a hangar they rented in the Buchansky district of the region bordering the capital. They allegedly used 3.5 million hryvnia (more than $128,000) in electricity.
In recent years, the rising popularity of cryptocurrencies has propelled Ukraine to the forefront of adoption, and the government has taken steps to legalize “virtual assets.” While bitcoin mining is not prohibited, it is not regulated. This year, the SBU has targeted miners who exploit the country’s electricity supply network, shutting down a number of crypto farms across the country, including a large data center in central Ukraine last month.