Russia Shuts Down 30,000 Square Meter Illegal Crypto Mining Farm

Law enforcement authorities in Russia have intensified their crackdown on illegal cryptocurrency mining operations, recently shutting down a large-scale mining farm in the middle of Siberia. The facility, which spanned nearly 30,000 square meters, was operating without the necessary permits and was connected to the city’s power grid illegally.

The mining operation, located in the city of Nazarovo in Krasnoyarsk Krai, was set up in an unusual manner, with crypto mining equipment installed in open air and behind a barbed wire fence. This attracted the attention of the local community, leading to an investigation by regional authorities. The property, registered as a non-residential building on an industrial site, was found to be repurposed for mining activities. The land was occupied by transformers, power plants, mobile centers, and other equipment leased to another organization for approximately 4.6 million rubles (nearly $60,000) a month.

The operator of the illegal mining farm had connected the hardware to the city’s power grid without obtaining the proper permits and rights to use the state-owned land. Additionally, inspectors reported violations of fire safety regulations. Initially, the prosecutor’s office demanded that the miner address the registered violations, but their request was ignored. Eventually, a lawsuit was filed, resulting in the ban of mining operations at the site until the violations are eliminated.

This crackdown is part of a broader effort by Russian authorities to address the excessive load on power distribution networks caused by crypto mining activities. The energy-intensive nature of mining has led to seasonal and permanent restrictions in many parts of the country. While a blanket ban on mining has affected almost a dozen Russian regions, the federal government is now focusing on targeting illegal mining farms rather than all mining firms. Recently announced legislative changes seek to punish so-called “gray” miners with hefty fines and crypto confiscation.

In February, authorities in Krasnoyarsk Krai charged an employee of a local utility with taking bribes to cover up the activities of illegal miners who caused damages exceeding 9 million rubles. This month, engineers in the Russian republic of Buryatia discovered 95 mining rigs hidden in the back of a truck, connected to power lines supplying electricity to a village. In Ingushetia, police detained a man who stole 2.34 million rubles’ worth of electricity to power 65 coin-minting devices illegally tapped into the grid. The mining installation was found in a utility room, connected to a substation, bypassing electricity meters.

The North Caucasian republic is among the Russian regions where cryptocurrency mining has been completely prohibited until the spring of 2031. This list includes territories from the Far East to the Russia-occupied oblasts of Ukraine. The ongoing crackdown highlights the government's determination to enforce regulations and ensure that mining activities do not disrupt the power supply or cause financial losses to the state.