In a significant operation targeting cryptocurrency mining in Russia, over 3,200 crypto mining rigs have been seized during police raids on four large data centers deemed illegal in Siberia, specifically in the city of Novosibirsk. The local branch of the Russian power provider, Rosseti, confirmed these actions, adding a serious tone to the crackdown on unauthorized crypto operations.
Cryptocurrency mining has been rapidly growing in regions like Novosibirsk and Irkutsk, turning them into major hubs within Russia. However, this growth has not come without its challenges. Local power providers have increasingly reported incidents of illegal mining activities, where operators connect to the power network without authorization to siphon electricity, thereby imposing additional strains and costs on local infrastructures.
The recent police operation in Novosibirsk was aimed at dismantling what Rosseti described as an interconnected network of crypto farms. These operations, according to the company, had been stealing a substantial amount of electricity, estimated at around $2.1 million from the local grid. This theft was facilitated through illegal connections, highlighting a pattern of sophisticated evasion of standard utility engagements.
During the raids, authorities did not just focus on seizing the cryptocurrency mining devices but also confiscated nine power transformers that were part of the mining setup. The operations were spread across various locations in Novosibirsk, including areas near a wastewater treatment plant, a forest on the outskirts of the Leninsky District, a city landfill on the left bank of the River Ob, and a private sector area in the Kalininsky District.
Rosseti’s spokesperson pointed out that the scale of electricity theft was industrial, indicating a high level of organization and potentially significant financial backing behind these operations. The illegal nature of these setups has prompted charges against the operators, who now face the possibility of jail time if convicted.
This crackdown is part of a broader series of actions by Russian power firms and law enforcement against illegal crypto mining activities in Siberia and beyond. Earlier in the year, similar operations led to the discovery of farms with hundreds of ASIC miners and substantial power theft, amounting to millions of rubles.
The continued enforcement actions underscore a growing concern about the sustainability and legality of crypto mining operations, especially in energy-strapped regions. While crypto mining can potentially offer economic benefits and attract technological investments to areas like Siberia, the illegal nature of many of these operations poses significant risks and costs to local communities and power infrastructures.
The broader implications of these crackdowns also touch on legislative efforts and the future of the industrial mining industry in Russia. There are ongoing discussions in Moscow and other regions about formalizing the status of crypto miners, potentially allowing them to contribute to state revenues through taxes and helping drive national IT projects.
As this situation develops, the balance between fostering technological advancement and ensuring legal and sustainable practices in industries like cryptocurrency mining remains a critical challenge for Russia.
