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Russian authorities are now prosecuting miners who mine cryptocurrency using subsidized electricity to the population, according to a top Energy Ministry official. Power plants detect their increased consumption and try to make them pay at commercial rates.
Electricity distribution companies in Russia have begun to identify improvised mining farms in residential buildings by the increasing volume of energy consumption and higher loads on the grid at substations, Deputy Energy Ministry Pavel Snikkars revealed to the Russian press.
The government official told the Izvestia newspaper that the authorities are going after the “illegal miners”. While crypto mining is not yet regulated and such activities are not explicitly prohibited right now, utilities can prove in courts that these consumers are not using the power for household needs.
Lawyers interviewed by the newspaper said that in at least 10 cases so far, suppliers have been able to oblige domestic miners to cover the difference between the preferential prices for the general population and the higher prices that companies are required to pay.
When increased electricity consumption triggers their suspicions, the companies would initially send an inspector to check and issue a new invoice based on the price of electricity used for commercial purposes, Snikkars explained. Finally, they could try to prove their claims in court.
Irkutskenergosbyt, the electricity distributor in the energy-rich region of Irkutsk dubbed the “mining capital of Russia,” was among the first to address the issue in 2021. According to a report in August of this year, crypto miners were in the Siberian oblast. , where prices start at just $0.01 per kWh in rural districts, has already paid 100 million rubles in fines (nearly $1.7 million at the time).
Pavel Snikkars revealed last week that Russia expects a significant increase in the share of cryptocurrency miners in the total consumption of electric power. He also emphasized that mining at home is a major problem in certain areas where the infrastructure is unable to handle the loads and energy companies have taken measures to ensure reliable supplies to other users.
Russian cryptomining needs about 1.7 GW of electricity, of which 50-60% is used in the industrial segment of the market, according to Oleg Ogienko, director of government relations at Bitriver, one of Russia’s largest mining farm operators.
Mining is one of the crypto-related activities that the Russian government wants to legalize and regulate in order to take advantage of the country’s competitive advantages for the industry such as cheap energy resources and cool climate conditions.
In November, a group of lawmakers submitted a bill to the lower house of parliament designed to regulate the minting of digital currencies such as bitcoin through changes to the country’s existing law “On Digital Financial Assets.” The legislation was supported by the Bank of Russia and expectations are that it will be adopted by the end of the year.
Do you think home cryptomining will remain an additional source of income for ordinary Russians in the future? Tell us in the comments section below.
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