Crypto miners in Russia’s Irkutsk region fined nearly $1.7 million this year – Mining Bitcoin News

Authorities in the energy-rich Russian region of Irkutsk this year imposed heavy fines on crypto miners for illegally using electricity to produce digital currencies. Kraftverk has also filed hundreds of lawsuits, according to a report, citing prosecutors.

Irkutsk Crypto Miners to pay 100 million rubles in fines in 2022

Cryptocurrency mining has become a profitable business for many companies in Russia’s energy-rich regions, and an alternative source of income for ordinary Russians. Despite the generally low electricity prices for commercial purposes, many have been tempted to mint digital coins for cheaper household electricity or even stolen energy.

Authorities in Irkutsk, an energy-rich Siberian oblast where prices start as low as $0.01 per kWh in rural districts, have gone after illegal mining. The latter has caused an increase in consumption in both residential and industrial areas, which has reportedly led to frequent breakdowns and shutdowns across the region.

This year alone, local power distribution companies have filed 400 lawsuits against miners who illegally exploited subsidized electricity meant for the population or illegally connected their hardware to the grid.

Meanwhile, the courts have imposed fines of almost 100 million rubles (close to $1.7 million at the time of writing). According to a January report, the Irkutskenergosbyt utility alone attempted to recover 63 million rubles (nearly $800,000) from illegal miners.

During recent raids, more than 9,000 units of mining equipment have been dismantled and removed from the Baikalsk thermal power plant and the village of Ust-Ordynsky, the regional prosecutor’s office announced this week, cited by the Federal Press portal. Closing the underground mine farms will prevent accidents at the heat supply plant, says a press release.

Mining is among the crypto-related activities still awaiting comprehensive regulation in Russia, with many officials in Moscow sharing a view that it should be recognized as an industrial activity and taxed accordingly, citing Russia’s competitive advantages of cheap energy and cool climate. In March, the Russian Ministry of Energy called for its urgent legalization and proposed the introduction of regional energy quotas for miners.

Home mining, on the other hand, is a phenomenon that the Russian authorities want to limit. While a finance ministry official indicated this spring that the government sees no point in trying to ban it completely, a trade association of power suppliers proposed measures to curb mining in basements and garages, and the country’s antitrust agency proposed introducing higher electricity prices for amateur crypto miners.

Do you expect Russian authorities to crack down on illegal crypto miners? Tell us in the comments section below.

Lubomir Tassev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’ quote: “To be a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.