Russia will place limits on cryptocurrency mining activities in energy-deficient regions, the country's Deputy Energy Minister Yevgeny Grabchak said. According to the state-run news agency TASS, which confirmed the news on Oct 30, the move targets those regions that cannot afford the high level of electricity consumption from large-scale mining activities.
The Far East, southwestern Siberia and the South will be affected most because these regions are suffering from a lack of energy supplies and infrastructure necessary to support large-scale mining. Power shortages will continue well into at least 2030, Grabchak added, making the long-term viability of mining operations problematic.
Illegal or small-scale mining has already received the attention of law enforcement bodies. On October 28, the police detained a resident of the Novosibirsk region on suspicion of electricity theft for the sake of mining: the suspect gained more than 12 million rubles (around $123,000).
This development comes after the approval of the Digital law on regulation of digital assets by President Vladimir Putin, which came into effect on November 1, thus giving a way to the government for introducing restrictions with relation to crypto mining based on demands on energy and infrastructure. The law also provided the standards to be observed in monitoring the circulation of digital assets and the management of mining pools, both of which contribute to energy grid overload.