In response to severe electricity shortages, authorities in Dagestan, a republic in Russia, are ramping up efforts to shut down illegal underground crypto mining farms. Local officials blame these operations for significant power theft and frequent outages that have affected residents.
Recent reports reveal that several hidden mining setups have been uncovered across the region. Dagestan’s Prime Minister, Abdulmuslim Abdulmuslimov, has called for stricter measures against these illicit activities, highlighting the miners’ evolving tactics to conceal their operations. At a recent meeting, he disclosed the discovery of unregistered mining farms located in underground caverns, which are increasingly challenging for law enforcement to detect.
Footage released by authorities showcased one such hidden farm in the Sergokalinsky district. A small entry led to a cavern containing over 15 mining machines, all cooled by industrial fans. Abdulmuslimov noted that this is just one of many similar operations, with miners now employing mobile installations to facilitate quick relocation when faced with raids.
In an attempt to bring order to the sector, Russia recently legalized crypto mining. A law signed by President Vladimir Putin in August 2024 will take effect on November 1, 2024, granting legal status to registered mining operations. This regulation will allow registered companies and individuals to mine legally while granting certain allowances for individual miners who stay within specified energy consumption limits.
Despite these regulatory efforts, Dagestan remains a hotspot for illegal crypto mining, experiencing a surge in electricity theft incidents. Since late 2023, police raids have become more frequent, and Dagestan is reportedly at the forefront of the country in cases tied to mining-related electricity theft. Authorities contend that these illegal operations have contributed to significant electrical disruptions, including a recent fire at a substation that left many areas without power for several days.
Prime Minister Abdulmuslimov has urged law enforcement to enhance their focus on identifying and shutting down hidden mining facilities, attributing power outages directly to the high energy consumption associated with these operations. As Dagestan grapples with these challenges, the government is determined to restore stability to the region’s power supply while regulating the crypto mining sector effectively.
September 2024, Cryptoniteuae
