Russia uses new monitoring system to crack down on illegal crypto mining

Russian authorities are utilizing a new consumption monitoring system to identify illegal crypto mining operations in the country.

The more aggressive approach, aided by anonymous signals from the population, is already yielding results, with the recent discovery of a serious underground installation in western Russia.

Crypto farm burns $700,000 of stolen electricity near Kaliningrad

An entrepreneur from the Russian exclave of Kaliningrad, who wanted to make some money by minting cryptocurrency, has been caught stealing electricity from the state.

According to a preliminary estimate published by the local utility, total financial damages resulting from his illicit undertaking amounted to 56 million rubles (almost $700,000).

More than 300 units of mining hardware have been seized from the profitable mining operation in Gvardeisky District of Kaliningrad Oblast, near the city of Kaliningrad, the company revealed in a press release.

On Wednesday, Rosseti Yantar Energosbyt, the largest energy distribution firm in the region, took to Telegram to report its findings and state:

“The offender will now have to compensate for the cost of the illegally used electricity. Otherwise, the matter will have to be resolved in court.”

All materials gathered during the investigation and an official report on the energy theft have been submitted to the police, and the post on the popular messenger detailed.

Russian utility screens power usage to locate crypto farms

Kaliningrad’s energy supplier noted it was able to establish that the electricity meter at the farm’s address had been bypassed, thanks to a special monitoring program implemented to track consumption.

Rosseti is monitoring energy usage to prevent illegal crypto mining activities, said the utility, which was also quoted by the Russian business news outlet RBC.

The local distributor, part of the state-controlled giant Rosseti, which unites regional grid operators across Russia, further emphasized:

“Illegal electricity consumption not only results in losses for power companies, but leads to emergency situations as well, due to extreme network loads.”

Rosseti Yantar Energosbyt also urged vigilant citizens to report any suspected energy theft by calling a toll-free number.

Russia is waging war against ‘black miners’ from Siberia to Ukraine

The Russian Federation legalized crypto mining in 2024, making it the first crypto-related activity officially recognized and regulated as a legitimate business in the country.

However, government estimates show that less than a third of operational mining enterprises have so far registered with the Federal Tax Service, which they are obliged to do by law.

Both licensed and unauthorized crypto farms have been blamed for electricity shortages and grid breakdowns in corners of the country that have been attracting miners with low electricity rates, often subsidized for the population.

About a dozen Russian regions, spanning from Siberia to the occupied parts of Ukraine, have already prohibited the energy-intensive minting of cryptocurrencies. A winter ban was enforced in another two territories last week.

Local and federal authorities have been waging a real war against rogue crypto miners and addressing the challenges in this fight with modern technologies.

Earlier in November, employees of the power utility in the Caucasian Republic of Dagestan flew a thermal vision drone to locate an elusive farm on wheels installed in the back of a van, as reported by Cryptopolitan.

And a few months ago, Rosseti announced it’s working with major Russian mobile operators on a mechanism to hunt down such so-called “black miners” by tracking internet traffic and matching it with other indicators such as data collected from smart electricity meters.