Russia’s Ministry of Energy Proposes ‘Pull the Plug’ Rule for Crypto Miners

• Cryptocurrency mining was recently legalized in Russia.
• Illegal mining operations have caused power shortages in certain regions of Russia.
• Russian President. Vladimir Putin has directly addressed the issue of cryptocurrency mining in recent months.

Russia’s Ministry of Energy is looking to curb the “uncontrolled growth” of crypto-mining and prevent power shortages with new energy rules. This follows recent efforts by the Russian government to legalize mining.

Russia’s Crypto Mining Proposal

As per local media  sources, Russia’s Ministry of Energy is seeking to bring in new rules that would enable them to cut off crypto miners from the nation’s power supply whenever they want.

More specifically, the Deputy Minister of Energy, Evgeny Grabchak, said the ministry is looking to create a new consumer category altogether.

“Now the introduction of a new category of consumers – the fourth – is being discussed quite actively. When there is no peak consumption, there is no power deficit, that is, most of the year, you can give this power to some consumers.”

The news comes as Russia looks to legitimize crypto, which includes recently legalizing cryptocurrency mining as part of its bid to curb sanctions and prevent power outages caused by illegal mining facilities.

Gray Mining

In July 2024, Russian President Vladimir Putin spoke directly on the matter of crypto mining and the risk of power shortages, claiming that they could have “serious consequences” for certain towns and cities.

As quoted by the press service  of the Kremlin:

“The uncontrolled growth in electricity consumption for cryptocurrency mining could lead to a power deficit in certain regions. And this has already been noted in the Irkutsk region, Buryatia, the Trans-Baikal Territory,”

Often referred to as “gray mining” operations, these crypto miners prefer to set up in regions with low energy tariffs and take advantage of energy infrastructure that is intended for domestic networks. Areas such as Irkutsk have become hotspots for illegal crypto mining.

Notably, Grabchak added that for experimental purposes, the fourth category could be applied to Irkutsk, Buruyatia, and Tansbailia regions, though they will need to seek approval from the relevant authorities there.

Furthermore, Russia’s new crypto mining rules will reportedly allow individuals to mine without needing to register with the authorities. Those that exceed a certain capacity will have to sign up.

Finally, the Russian government is considering banning crypto mining in certain regions of Russia, presumably where the infrastructure cannot handle the rapid expansion of mining facilities.

About the Author

Eddie Mitchell

Eddie has been writing news and content primarily for crypto news and industry players over the past seven years. With an eye for the bigger picture, Eddie prefers to investigate the broader implications of a story, as well as explore the weird and wonderful world of crypto. He believes blockchain has already changed the world, but observes the space overall with a skeptical and adoring eye.

See more

[email protected]