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Russia Cracks Down on Illegal Crypto Mining Farms Ahead of 2025 Ban

Published
Prashant Jha
Published
By Prashant Jha
Edited by Insha Zia

Key Takeaways

  • Russia targeted illegal crypto miners in the Irkutsk region.
  • Authorities uncovered underground operations consuming massive energy.
  • New regulations mandate industrial miners to register with the tax agency.

Russian authorities have intensified their efforts to shut down illegal crypto-mining operations, starting with a crackdown in the Irkutsk region.

This move comes just days after the government announced a six-year moratorium on mining in several energy-strapped regions, signaling growing concerns over the strain on the country’s power grid.

Irkutsk: A Hub for Illegal Crypto Mining

The Irkutsk Electric Grid Company, in collaboration with law enforcement agencies, identified and disconnected an illegal mining operation in the city’s industrial zone.

Investigators discovered over 200 advanced ASIC mining rigs housed in a container operating without proper registration.

This single operation consumed more than 600,000 kWh of electricity monthly—equivalent to the energy usage of 80 to 100 residential homes.

While the business was registered as a legal entity, it failed to comply with the Federal Tax Service’s crypto-mining registry requirements.

Tighter Regulations for Crypto Miners

In November, Russia implemented comprehensive regulations for the crypto industry, requiring industrial-scale miners to register with the tax authority.

Solo and noncommercial miners are exempt from registration but must adhere to strict electricity consumption limits.

These measures aimed to formalize the sector and curtail illicit activities, yet unregistered operations continue to thrive, particularly in regions like Irkutsk, where electricity rates are lower.

Balancing Energy Demands and Crypto Ambitions

Earlier this year, Russia embraced the crypto industry to mitigate sanctions-related trade challenges.

President Vladimir Putin legalized crypto mining in August, and by November, lawmakers introduced a regulatory framework to encourage mining activity, leveraging the country’s cold climate and abundant electricity.

However, the burgeoning industry has outpaced expectations, with illegal mining operations causing widespread power shortages.

In response, the government imposed temporary crypto mining bans in over ten regions to stabilize the energy grid.

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Prashant Jha is a crypto-journalist focused on the US and UK markets, his interests lie in blockchain technology and crypto adoption across emerging economies.
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