In a significant crackdown on illegal cryptocurrency mining, Russian police have confiscated more than 3,200 crypto mining rigs from four large data centers in Siberia. This action highlights ongoing efforts to curb illegal activities that are becoming increasingly prevalent in regions rich in mining infrastructure.
Details of the Raids
The operations, which were conducted in the city of Novosibirsk, Siberia’s largest city, resulted in the seizure of 3,225 cryptocurrency mining devices and nine power transformers. These facilities were part of an interconnected network, operating without legal connections to power grids, leading to substantial electricity theft.
Background on the Illegal Operations
According to the Novosibirsk branch of Rosseti, the national power provider which reported the findings via RBC Crypto, the illegal miners had stolen an estimated $2.1 million worth of electricity from the local grid. Rosseti described the operation as "electricity theft on an industrial scale." The operators of these mining centers now face criminal charges, with potential jail time if convicted.
Locations and Logistics
The raids targeted diverse locations around Novosibirsk, including near a wastewater treatment plant, in a forest at the outskirts of the Leninsky District, near a city landfill on the left bank of the River Ob, and in a private sector area in the Kalininsky District. Each site was found to be equipped with modern power equipment, which was utilized for mining without legal authorization.
Broader Context and Crackdown
This crackdown is part of a larger series of actions against illegal crypto mining across Siberia and other regions. For instance, earlier this year, a mining farm operating with 100 ASIC miners was discovered on the outskirts of Novosibirsk. Similarly, in Irkutsk Oblast, a 217-rig mining farm was shut down in March, with operators charged for stealing $11,000 worth of power.
Throughout 2023, Rosseti in collaboration with local police has shut down 17 illegal mining farms in cities like Krasnoyarsk, Omsk, and Khakassia, with further raids conducted in the Krasnoyarsk Territory, Khakassia, and the Omsk Oblast.
Implications and Future Measures
The crackdown reflects the tension between the burgeoning crypto mining industry and the state’s effort to regulate or control its electricity usage. While miners seek to formalize their operations and contribute to the state via taxes, authorities are tightening measures to prevent power theft and ensure that mining activities are conducted within legal frameworks. This situation continues to evolve as Russian lawmakers consider new legislation to address these challenges comprehensively.
Conclusion
The ongoing raids and the broader crackdown on illegal crypto mining farms underscore the challenges and complexities of managing a fast-growing industry within legal and operational boundaries. These efforts are not just about curbing illegal activities but also about setting a precedent for how cryptocurrency mining should be managed in terms of energy consumption and legal compliance.
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