October 3, 2023

Russian Crypto Miners In Irkutsk Fined $1.7 Million This Year

Crypto miners in the energy-rich region of Irkutsk in Russia have found themselves facing hefty miners from authorities this year because they used electricity illegally in order to mint digital currencies.

A report quoting prosecutors also revealed that hundreds of lawsuits have also been filed by power utilities.

Illegal mining operations

A number of companies in energy-rich areas of Russia are engaging in crypto mining because it has turned out to be quite profitable.

Moreover, ordinary Russians are also using crypto mining as an alternative source of income.

While electricity rates are generally low for commercial activities, many are tempted to use cheaper household power for minting digital coins or even using stolen energy.

Siberian oblast Irkutsk is known for its abundant resources of energy and the electricity rates start as low as $0.01 for every kWh in rural areas.

Authorities in the region have become proactive against illegal mining operations, as they are responsible for an increase in consumption in both industrial and residential areas.

This has allegedly resulted in frequent power outages and breakdowns in the region. The year has seen almost 400 lawsuits filed by local power distribution companies against crypto miners.

The companies have claimed that the miners are taking advantage of subsidized electricity unlawfully, which is meant for the people. These miners connect their hardware illegally to the power grid.

Hefty fines

Due to these activities, fines of about 100 million rubles have been imposed by courts, which is around $1.7 million.

Back in January, a report disclosed that the Irkutskenergosbyt utility had gone after illegal miners in order to recover 63 million rubles, which is valued at $800,000.

This week, the regional Prosecutor’s Office announced that they had dismantled and removed about 9,000 units of mining hardware from the village of Ust-Ordynsky and the Baikalsk thermal power plant.

According to a press release, accidents can be prevented at the heat supply facility by shutting down these underground crypto mining farms.

No regulation

It should be noted that crypto mining is one of those crypto-related activities in Russia that have not been regulated as yet.

A number of officials in Moscow have stated that crypto mining should be given the status of industrial activity and should be taxed.

They have also cited the competitive advantages of Russia, such as a cool climate and cheap energy. The Russian Energy of Ministry said in March that it should be legalized urgently.

It also suggested that regional energy quotes be introduced for miners. On the other hand, one activity that Russian authorities want to restrict is at-home mining.

An official of the finance ministry said this spring that trying to completely ban at-home mining is pointless.

Instead, measures were proposed by power suppliers for curbing mining activities in garages and basements.

Moreover, the anti-monopoly agency in the country also suggested that higher electricity rates should be introduced for amateur crypto miners.

These measures could be useful in limiting at-home mining activities in Russia.

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