Russia Shuts Down 8,000 Illegal Crypto Miners in Irkutsk Amid Energy Crisis

Russian authorities in the Irkutsk Oblast have identified over 8,000 illegal cryptocurrency mining operations, part of a broader crackdown on unregulated activity that has exacerbated energy shortages in the region [1]. The Siberian region, often described as the crypto mining capital of Russia, has seen a surge in both legal and illegal operations, straining the local power grid and prompting the government to impose restrictions on mining in certain areas [1].

The local energy provider, Irkutskenergosbyt, revealed that the largest number of illegal mining points—approximately 1,500—have been identified in the city of Irkutsk, with another 1,700 in the Irkutsky District [1]. The cities of Angarsk and Shelekhov are also designated as "red zones" due to the high density of such operations [1]. According to the utility company, the actual number of illegal miners is likely much higher, as many operate under the radar in residential areas, using improvised "noise boxes" to avoid detection [1].

These "gray" miners are individuals who consume less than 6,000 kWh of electricity monthly and are not required to register with the Federal Tax Service (FNS). In contrast, "black" miners operate without legal access to power, often by tapping into the grid illegally [1]. Rosseti, Russia’s national grid operator, has been using electricity usage patterns and internet traffic data to identify and shut down these operations.

The crackdown reflects a shift in policy, as Russia legalized cryptocurrency mining in 2024, allowing both companies and individuals to mine if registered with the FNS [1]. However, the rapid growth of the industry, driven by Russia’s low energy costs, has led to widespread grid instability in some regions, prompting local and federal authorities to impose temporary or permanent bans on mining [1].

The federal government has supported such restrictions, with President Vladimir Putin recently emphasizing the importance of a balanced use of natural resources [1]. Over a dozen Russian regions, including parts of the annexed Ukrainian territories, have banned mining until 2031 [1]. In Irkutsk, the originally seasonal winter ban on mining has now become a year-round restriction.

Legislation is also being reviewed to prevent mining in data centers, with proponents arguing that the computing power could be better used in fields like artificial intelligence [1]. Operators of such infrastructure are now required to report any mining activity to the FNS and other authorities [1].

Penalties for illegal mining are expected to become more severe, with proposals including the ability for officials to remotely disconnect crypto farms from the grid during peak electricity demand [1].

Source: [1] Authorities root out over 8,000 illegal miners in Irkutsk, Russia’s crypto mining capital (https://coinmarketcap.com/community/articles/689b399332d6c14874b49178/)