According to a report uploaded on February 18, last year, Russia’s Rosseti Group, a major player in the nation’s electricity sector, reported damages of over 1.3 billion rubles (approximately $14.2 million) caused by “unauthorized” cryptocurrency mining operations.
These “black” mining farms tapped directly into Rosseti’s power network without authorization, severely impacting the company’s resources and operational efficiency.
The regions most affected included the North Caucasus, Novosibirsk, and the Center and Volga areas, where illegal connections contributed to significant electricity theft and network disruptions.
Impact of Illegal Crypto Mining on Rosseti’s Operations
According to Rosseti’s report, 130 illegal connections were uncovered and shut down, resulting in over 40 criminal cases. The company highlighted that these unregulated mining activities not only drained financial resources but also caused serious electrical issues, including frequent voltage drops that damaged equipment and appliances.
One notable instance of such occurred in Karachay-Cherkessia, where authorities found almost 200 mining systems in a single warehouse. This operation alone consumed more than 12,000 kWh of electricity, leading to power disruptions and numerous complaints from local residents.
Rosseti emphasized that the sheer scale of these operations often put immense strain on local electrical grids. Unauthorized crypto mining farms ranged from small setups in rented containers near Nizhny Novgorod to large-scale facilities hidden in underground parking lots in Makhachkala.
The company revealed that one of the most significant busts took place in Novosibirsk, where over 3,200 mining devices were discovered at a single site.
This industrial-scale operation alone resulted in damages of 197 million rubles. Law enforcement officials detained the individual responsible, highlighting the serious legal repercussions of such activities.
In addition to financial losses, these operations disrupted the normal power supply for legitimate customers. Many households and businesses experienced frequent power fluctuations and lower-than-normal voltage levels.
Rosseti noted that such problems not only lead to customer dissatisfaction but also cause long-term wear and tear on infrastructure, increasing maintenance costs and the risk of equipment failure.
Preventive Measures and Legal Actions
To combat these issues, Rosseti has ramped up efforts to identify and shut down unauthorized mining farms. The report read:
Rosseti emphasizes that 130 cases of illegal connection to networks and unaccounted consumption have been stopped. “The materials have been transferred to law enforcement agencies. More than 40 criminal cases have been initiated under articles of the Criminal Code of the Russian Federation that provide for punishment with a real term of imprisonment.
Furthermore, the company has called for stricter regulatory oversight and more robust enforcement measures to deter illegal activities.
Meanwhile, in related news, Russia has recently initiated seasonal bans to crypto mining in some particular sectors of the region.
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