Russian authorities seized 238 rigs, the crackdown on illegal miners continues

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Authorities in Russia ramped up their efforts to combat illegal crypto mining, seizing 238 mining rigs in a region that has become a key hub for Bitcoin mining.

Cheap electricity, profitable Bitcoin mining

In Russia’s unofficial Bitcoin mining center, the Irkutsk region, law enforcement officials recently confiscated 238 cryptocurrency mining rigs.

The equipment was found in a local community that was reportedly dedicated to gardening.

The Investigative Committee of the Russian Federation for the Irkutsk Region conducted the raid in Priangarye.

Authorities have estimated that the illegal mining activities caused over 68 million rubles, or approximately $758,000 in damages.

The seized rigs were in the possession of members of the Angarsky Bereg gardening partnership, a non-profit organization that supposedly consists of agricultural workers in rural areas.

Irkutsk, the land for crypto miners

Irkutsk has become the heart of Russia’s crypto mining industry, largely because of its extremely low energy costs and cold winter temperatures, which are ideal for cooling the mining equipment.

This popularity also led to an increased strain on local power grids, with miners accused of causing frequent disruptions.

Many illegal miners are said to be using makeshift equipment to connect to the grid, exploiting electricity subsidies meant for residential use to power their operations.

Authorities have launched a criminal investigation into the illegal miners, charging them with fraud for paying discounted electricity rates meant for household needs.

The case has been forwarded to the local prosecutor’s office.

Bitcoin mining is welcomed as regulated and taxable operation

Since China banned cryptocurrency mining in 2019, Irkutsk gained prominence as a mining destination, due in part to having the lowest electricity rates in Russia.

But this also led to a rise in illegal mining operations, with miners setting up equipment in various unconventional locations, including houses, garages, and even balconies, capitalizing on the extremely cheap household electricity prices.

The industrial crypto mining has been legalized in Russia almost exactly a year ago, but miners are required to register their operations and may face higher electricity rates.

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The provinces also have the authority to order miners to shut down their rigs during periods of grid overload.

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