Amid new legislation for crypto mining in Russia, local authorities have uncovered illegal crypto mining farms in the southern republic of Dagestan. The regional prime minister urged law enforcement to increase their efforts to combat illegal mining operations as the region struggles with power consumption.
Underground crypto mining centers busted
On Tuesday, news media outlet Reuters Report Dagestan authorities have called for a crackdown on illegal crypto mining centers in the region. Dagestan Prime Minister Abdulmuslim Abdulmusalimov asked law enforcement to pay more attention to the methods miners are constantly developing.
At a meeting held to discuss preparations of energy, housing and utility facilities for the winter, the regional leader revealed new ways of hiding unregistered mining farms, and said that several mining centers have been discovered underground:
Owners of illegal cryptocurrency mining establishments are adopting new ways to ‘circumvent’ the law – they are setting up underground mining farms.
According to the report, officials showed video of a temporary underground cave in the Sergokalinsky district. It shows the entrance is a narrow square at ground level, easily concealable, with a staircase leading down to the cave. After descending, officials found more than 15 mining machines, with dozens of fans cooling the computers.
Inside of the underground cave used for illegal crypto mining. Source: Mario Nawfal on X
Abdulmuslimov explained that this is one of many underground crypto mining farms in the region. In addition, he added that miners also use “mobile installations” for their farms, which allows them to move more easily.
Russia’s new mining era
Crypto mining has recently been legalized in Russia, reports Bitcoinist. In August, Russian President Vladimir Putin signed a new law to give the sector legal status within the country, with the aim of keeping it at the forefront of innovation and tackling illegal operations.
The new law will take effect on November 1, 2024, allowing registered companies and individuals to operate legally. Under the new law, crypto miners and mining companies will have the “exclusive right” to mine in the country.
However, those who do not exceed the energy consumption limits set by the Russian government will have the right to mine without registration. It is worth noting that the crackdown on crypto mining farms has been an ongoing issue in the Republic of Dagestan.
A report from The Insider Detailed Police raids on mining centers in the region have become more frequent since late 2023. Investigations claim that Dagestan “probably ranks first in all of Russia” in terms of the number of electricity thefts used for crypto mining, and authorities believe mining operations are responsible for power problems due to their high consumption.
Eventually, Dagestan’s prime minister ordered law enforcement agencies to take tough action, and accused illegal mining centers of causing power disruptions, including a recent fire at a substation that cut off power to several districts for more than a week.
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