Russia Cracks Down on Illegal Crypto Mines in Dagestan
Russian authorities in Dagestan intensify efforts to shut down illegal underground crypto mining farms, blaming them for regional power outages and electricity theft.
Authorities in Russia’s Republic of Dagestan have intensified efforts against illegal crypto mining, uncovering several underground mining farms. As the region faces electricity shortages, local officials are pushing law enforcement to step up actions against these hidden operations.
This week, media outlets reported that authorities discovered a number of crypto mining setups hidden underground. Dagestan’s Prime Minister, Abdulmuslim Abdulmuslimov, called for tougher measures, noting that miners are continually developing new methods to hide their activities. At a recent meeting, the prime minister disclosed that several unregistered mining farms were found in underground caverns, making them harder to detect.
Authorities showed footage of a hidden farm in the Sergokalinsky district, where a small ground-level opening led to a cavern filled with more than 15 mining machines cooled by fans. Abdulmuslimov emphasized that this was one of several similar operations. He also mentioned miners increasingly use mobile installations, making it easier for them to relocate.
In an effort to regulate the sector, Russia recently legalized crypto mining. In August 2024, President Vladimir Putin signed a law giving the industry legal status. The law, effective November 1, 2024, allows registered companies and individuals to mine legally. Under this new regulation, registered miners will have exclusive rights, while individuals below the government's energy consumption limits will be allowed to mine without registration.
However, Dagestan has been a hotspot for illegal crypto mining, with frequent crackdowns on electricity theft. Reports suggest that police raids in the region have surged since late 2023, and Dagestan is thought to lead the country in cases of electricity theft linked to mining. Authorities believe that these operations are causing major electrical issues, including a recent fire at a substation that left parts of the region without power for several days.
Dagestan’s prime minister has demanded tougher measures against illegal miners, blaming their high energy consumption for power outages. Authorities are now focusing on finding hidden mining centers and preventing further disruptions to the region’s power supply.
