As part of Russia’s new cryptocurrency mining legislation, local authorities have uncovered illegal cryptocurrency mining farms in the south of the Republic of Dagestan. The regional prime minister urged law enforcement to step up efforts to combat illegal mining operations as the region struggles with limited electricity consumption.
Underground Cryptocurrency Mining Centers Dismantled
On Tuesday, Reuters news agency reported that authorities in Dagestan have called for tougher measures against illegal cryptocurrency mining centers in the region. Abdulmuslim Abdulmuslimov, Prime Minister of Dagestan, asked law enforcement to pay more attention to the ever-changing methods of work that miners are constantly developing.
During a meeting to discuss preparations for winter for energy, housing and utility facilities, the regional leader learned about new methods of concealing unregistered mining farms, revealing that several mining centers have been discovered underground:
Owners of illegal cryptocurrency mining operations are inventing new methods to “circumvent” the law: they are installing mining farms underground.
According to the report, authorities showed a video of an improvised underground cavern in the Sergokalinsky district. It shows that the entrance is a narrow square at ground level, which can be easily concealed, with a ladder leading to the cave. After the descent, authorities 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 pointed out that this is one of many underground crypto mining farms in the region. Additionally, he explained that miners also use “mobile facilities” for their farms, which allows them to move around more easily.
The New Mining Era in Russia
As Bitcoinist reports, cryptocurrency mining has recently been legalized in Russia. In August, Russian President Vladimir Putin signed a new law to give the sector legal status in the country, in an attempt to be at the forefront of innovation and combat illegal operations.
The new legislation will come into effect on November 1, 2024, allowing registered companies and individuals to operate legally. Under the new law, cryptocurrency miners and mining companies will have “exclusive rights” to mine in the country.
However, people who do not exceed the energy consumption limits set by the Russian government will have the right to mine without registering. It is worth noting that the crackdown on cryptocurrency mining farms is a recurring problem in the Republic of Dagestan.
A report from The Insider detailed that police raids on mining centers have become more frequent in the region since late 2023. The investigation claims that Dagestan “is most likely the first in all of Russia in terms of the number of detected electricity thefts” used for cryptocurrency mining, and authorities blame mining operations for the electricity problems due to their high consumption.
Finally, the prime minister of Dagestan ordered law enforcement to tighten measures, alleging that illegal mining centers have caused power outages, including the recent fire at a substation that left several districts without electricity more than a week ago.
Bitcoin is trading at $63,599 in the weekly chart. Source: BTCUSDT on TradingView
Featured image from Unsplash.com, chart from TradingView.com
