Russia and Ukraine Shut Down Illegal Mining Centers

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Key Takeaways:

  • Authorities in Russia and Ukraine shut down illegal mining centers allegedly powered by stolen electricity. 
  • Underground farms have been discovered in and around the Ukrainian and Russian capital cities of Kyiv, Moscow, and the Russian republic of Dagestan. 
  • A large amount of electricity was stolen from the Rosseti network in Moscow Oblast.
  • The Ukrainian Security Service (SBU) announced on Friday that it had discovered an illegal mining facility in Kyiv Oblast.
Russia And Ukraine Shut Down Illegal Mining Centers
Russia and Ukraine Shut Down Illegal Mining Centers

Authorities in Russia and Ukraine have shut down several illegal crypto mining operations allegedly powered by stolen electricity. In addition, underground farms have been discovered in and around the Ukrainian and Russian capital cities of Kyi, Moscow, and the Russian republic of 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. Tass reported on the operation this week, citing Ekaterina Korotkova of the Moscow Interregional Transport Prosecutor’s Office.

The officials stated that 

“An audit revealed an unauthorized connection to the power grid, theft of electricity and illegal seizure of land for the operation of equipment designed to perform cryptographic calculations related to the mining of digital currencies.”

According to Korotkova, the cost of illegally consumed electricity used to power the mining hardware exceeds 500,000 rubles per day (nearly $7,000). As a result, authorities have opened a criminal investigation and intend to prosecute the coin minting facility’s owners.

Two cryptocurrency farms were also busted in Dagestan, a republic of Russia situated in the North Caucasus. In late November, the Komsomolskaya Pravda newspaper reported that a large mining operation had been found in a mountainous region. Preliminary data from the investigation suggests that its unknown operators have caused damages of an estimated 1 million rubles (over $13,000).

Local police have also discovered a mining enterprise in Botlikh district where miners were illegally connected to the grid. According to Forklog, which cited Dagestan’s interior ministry, 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.

Meanwhile, the Ukrainian Security Service (SBU) announced on Friday that it had discovered an illegal mining facility in Kyiv Oblast. According to Ukraine’s primary law enforcement agency, three local residents installed several ASICs in a hangar they rented in the Buchansky district of the region bordering the capital. They allegedly used 3.5 million hryvnias (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.” However, 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 many crypto farms across the country, including a large data center in central Ukraine last month.

Chaahat Girdhar
Chaahat Girdhar

I'm Chaahat Girdhar, a journalist by profession who's turning her dreams into vision and vision into reality. I'm curious and have an appetite for gaining new knowledge. So I'm looking forward to learning things in the better way possible.

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