Russian Authorities Crack Down on Illegal Crypto Mining in Irkutsk, Seize 238 Mining Rigs

In a continued effort to address illegal cryptocurrency mining, Russian authorities have confiscated 238 mining rigs from a settlement in Irkutsk, a region often dubbed Russia’s unofficial Bitcoin (BTC) mining capital. The community, ostensibly dedicated to gardening, was raided by the Investigative Committee of the Russian Federation for the Irkutsk Region.

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Illegal mining caused losses of US$758,000

Authorities have alleged that the illegal miners, who were residents of the Angarsky Bereg gardening partnership, caused damages exceeding 68 million rubles ($758,000). The mining equipment was reportedly used inappropriately, drawing subsidised electricity meant for residential purposes to power the rigs.

This fraudulent use of energy has been a growing concern in the Irkutsk region, which has become a hub for cryptocurrency mining due to its low energy rates and cold winters. Miners have been accused of overloading power grids, contributing to widespread disruptions in the area.

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Criminal Charges Filed

A criminal case has been launched against the individuals involved, with charges related to fraud. The case has been handed over to the local prosecutor’s office for further action.

Irkutsk: A Centre for Bitcoin Mining

Since 2019, Irkutsk has emerged as a key location for Bitcoin mining, partly due to China’s ban on cryptocurrency mining and the region’s low electricity tariffs. Despite the legalisation of industrial crypto mining in Russia as of September 1, many operations remain illegal. Miners are now required to register their activities and may face higher electricity costs. Authorities also have the power to temporarily shut down operations if the local grid becomes overloaded.

This is not the first instance of such crackdowns. In July, officials seized 500 rigs from a similar community, and earlier in the year, charges were pressed against another suspected illegal miner.

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Mining Rigs Seized Amid Growing Regulatory Pressure

The case highlights the ongoing challenges Russia faces as it tries to regulate its growing cryptocurrency sector amidst global sanctions. Despite the legalisation efforts, the majority of Russian crypto miners, especially those focusing on Bitcoin, continue to operate illegally.