Amid the new crypto mining law in Russia, local authorities discovered illegal crypto mining farms in southern Dagestan. The chief minister of the region urged the law enforcement to increase their efforts to deal with illegal mining as the region is struggling with the use of electricity.
Underground Crypto Mining Centers Destroyed
On Tuesday, the news source Reuters reported that the authorities of Dagestan have taken strict measures against illegal crypto mining centers in the region. Abdulmuslim Abdulmuslimov, the prime minister of Dagestan, asked law enforcement to pay more attention to the progressive methods that miners continue to develop to work.
In a meeting to discuss the preparations for electricity, housing, and winter facilities, the regional leader revealed new ways of hiding unregistered mining farms, revealing that several mining centers have been found underground:
Owners of illegal cryptocurrency mines are coming up with new ways to ‘bypass’ the law – they are putting mining farms underground.
According to the report, the authorities showed a video of a temporary underground cave in Sergokalinsky district. It shows that the entrance is a small square on the ground floor, which can be easily hidden, with a staircase leading to a cave. After landing, authorities found more than 15 mining machines with many fans cooling computers.
Inside of the underground cave used for illegal crypto mining. Source: Mario Nawfal on X
Abdulmuslimov revealed that this was one of the few underground crypto mining farms in the region. In addition, he shared that miners are also using “mobile installations” in their farms, allowing them to move around easily.
The New Age of Russian Mining
As reported by Bitcoinist, crypto mining was recently legalized in Russia. In August, Russian President Vladimir Putin signed a new law to give the sector legal status in the country, trying to be at the forefront of innovation and tackling illegal operations.
The new law will come into effect on November 1, 2024, allowing registered companies and individuals to operate legally. Under the new law, crypto miners and mining companies will have “exclusive rights” to mine in the country.
However, people who do not exceed the restrictions on the use of energy set by the Russian government will have the right to mine without registration. It is worth noting that exploitation of crypto mining farms has been an ongoing problem in the Republic of Dagestan.
The Insider report revealed that police raids on mining facilities have become more common in the region since late 2023. The investigation says that Dagestan is “probably the first in the whole of Russia when it comes to the number of cases of electricity theft” detected. crypto mining, and authorities consider that mining operations are responsible for electricity problems due to their high consumption.
Finally, Dagestan’s prime minister ordered law enforcement to step up measures, saying illegal mining facilities have caused blackouts, including the latest substation fire that left several districts without power a week ago.
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