Russian Power Provider Busts ‘Illegal 110-Rig Crypto Mining Farm’

Rosseti Cracks Down on Illegal Crypto Operations, Seizing 110 Rigs in Major Raid

In a major move to combat illegal crypto mining, Rosseti, Russia’s leading power provider, recently shut down a massive 110-rig crypto mining operation in Makhachkala, Dagestan. This raid is part of the company’s ongoing efforts to curb unlicensed mining activities that continue to put a strain on the country’s power grid.

The raid was conducted by Dagenergo, the North Caucasus arm of Rosseti, with assistance from local authorities. The operation unfolded in the heart of Makhachkala, Dagestan’s capital, where the illegal mining farm was discovered in a private home. Officers from the Russian Ministry of Internal Affairs were also involved in this significant crackdown.

Growing Concern Over Illegal Mining in Russia

Illegal crypto mining has become a growing issue in Russia, with power providers like Rosseti increasingly stepping in to dismantle these operations. The issue has been particularly pronounced in regions like Dagestan, where unregulated mining farms often take advantage of cheap electricity to run hundreds of high-powered rigs without authorization.

Rosseti’s North Caucasus arm, Dagenergo, has been especially active in recent months. The firm recently announced that it had taken down 28 illegal crypto mining farms in Dagestan alone this year. This number highlights a troubling trend in the region, where the mining operations are not only causing power outages but also potentially damaging the local energy infrastructure.

The Raid: Inside the Makhachkala Crypto Farm

Footage from the raid, which was shared on the Telegram channel of Rosseti and Dagenergo, offers a glimpse into the extent of the operation. According to the video, the makeshift mining farm was housed within a private residence, with various sections dedicated to different aspects of the mining process.

One area was converted into a tech lab, possibly used for rig maintenance or repairs, while another space was packed with mining equipment. The footage also revealed a control center for the operation, where multiple power lines and an altered electricity meter were visible. This manipulation of the meter is a common tactic in illegal mining operations, allowing miners to bypass high energy costs.

The final part of the video shows officers gathering and stacking up the confiscated rigs, a testament to the scale of the operation. In total, 110 mining rigs were seized in the raid, a significant haul for the authorities.

Russia’s Crackdown on Crypto Mining Intensifies

Rosseti’s actions come at a time when Russian authorities are tightening regulations around crypto mining. Earlier in November, Moscow imposed a ban on crypto mining in several regions, including Dagestan, with the ban set to last until 2031. This move was largely in response to the escalating problem of illegal mining and its impact on the country’s power grid.

The crackdown in Dagestan has been particularly intense, with a series of raids uncovering large-scale mining operations. In September, authorities uncovered a 17-rig underground farm in Makhachkala’s Sergokalinsky District, highlighting the lengths to which some illegal miners will go to avoid detection.

Authorities have also taken legal action against suspected offenders. To date, 12 criminal cases have been opened against individuals involved in illegal mining, with more expected as investigations continue. In addition, engineers are currently assessing the damage caused by the seized mining rigs to the regional energy system, which has suffered due to the heavy strain these operations place on local power resources.

Local Government’s Role in Combating Illegal Mining

The government of Dagestan has been vocal about the need to address the rise in illegal mining. Sergey Melikov, the head of the Dagestan government, publicly called on Moscow to take further action to curb the activities of unauthorized miners in the region. The recent winter months ban on mining is seen as a significant step in controlling the problem, though it remains to be seen how effective it will be in the long term.

Despite these efforts, the illegal mining problem continues to persist, driven in part by the high demand for crypto mining in Russia and the country’s relatively low electricity prices. The ongoing battle between the authorities and illegal miners underscores the broader global debate about how to regulate the cryptocurrency industry and its energy consumption.

A Look Ahead: Will the Crackdown Continue?

As Rosseti continues its efforts to eliminate illegal mining operations, the future of crypto mining in Russia remains uncertain. The growing crackdown may force some miners to find more covert ways to operate, while others may decide to relocate to countries with looser regulations or cheaper energy sources.

For now, though, the focus remains on Dagestan, where authorities are working to assess the full impact of the recent raids. It is clear that Rosseti and other power providers will not back down in their pursuit of illegal mining operations, especially given the potential harm to the country’s energy infrastructure.