Illegal Crypto Mining Operation Discovered in Siberian Orphanage

Russian prosecutors have uncovered an illegal cryptocurrency mining operation hidden within a Siberian orphanage. The discovery was made in the village of Kazachye, located in the Bokhansky District of Irkutsk. Officials confiscated 96 mining rigs from the facility, which was operated by an unnamed non-profit organization. The orphanage, a three-story building, is currently closed but remains registered as an educational facility.

The mining operation posed significant risks to human life due to violations of electricity and fire safety laws. The operators failed to conduct preventive maintenance on the electrical equipment and wiring, and did not install necessary safety devices such as fire alarms. These actions endangered the safety of the orphanage and its surroundings.

An Irkutsk-based court ordered bailiffs to disconnect the mining equipment and halt its misuse. Prosecutors have opened a legal case against the head of the non-profit organization for violating energy usage rules, as well as regulations governing the construction and operation of energy-consuming equipment and fire safety regulations.

Illegal crypto mining appears to be on the rise in Irkutsk, Russia’s first and biggest Bitcoin mining hotspot. Despite a ban on crypto mining during the winter months in many parts of Irkutsk Oblast, including the Bokhansky District, the practice remains attractive due to low electricity rates and the region's cold winters, which reduce cooling costs. However, this has led to significant strains on the power grid, prompting calls for a year-round ban on crypto mining in much of Irkutsk until 2031.

There is little evidence to suggest that these bans are deterring illegal crypto mining activities. Operators have been found installing equipment in various locations, including apartments, private plots of land, gardening associations, and commercial buildings. Energy experts have warned that many of these locations are not equipped to handle such heavy electrical loads, posing additional risks.

Last month, officials in the Irkutsk settlement of Markova discovered a mining farm with 150 rigs. A local resident used a facility comprising four plots to house ASIC Bitcoin miners, utilizing illegal cable connections to link to a transformer. Other regions in Siberia, such as the Tyumen Oblast, are also taking measures to combat illegal and quasi-legal crypto mining operations. Officials in Tyumen have vowed to prepare relevant proposals by April 1 to address the rise in "gray" cryptocurrency mining in the region.