Dagestan Cracks Down on Illegal Crypto Mining Amid New Regulations

Following new regulations on crypto mining in Russia, Dagestan authorities have uncovered numerous illegal mining operations, prompting the regional prime minister to call for increased law enforcement efforts against these illicit activities amid rising electricity consumption.

Recent reports indicate that officials are intensifying their actions against unregistered mining facilities, with Prime Minister Abdulmuslim Abdulmuslimov highlighting the need to adapt to the evolving tactics used by miners. During a meeting focused on energy preparations for winter, he revealed that some operations are being hidden underground to avoid detection.

Footage from authorities displayed a concealed mining site in the Sergokalinsky district, which featured a hidden entry and housed over 15 mining rigs, complete with cooling fans. Abdulmuslimov mentioned that these underground setups are just a few examples, and miners are also using portable installations for greater mobility.

In August, President Vladimir Putin legalized crypto mining in Russia, aiming to regulate the sector and eliminate illegal practices. The new law, effective November 1, 2024, will permit registered entities to mine legally, while smaller operations adhering to energy limits can continue without formal registration.

However, Dagestan remains a hotspot for illegal mining, with police raids increasing since late 2023. Investigations reveal that the region has the highest instances of electricity theft linked to crypto mining in Russia, causing significant power issues. The prime minister has urged stricter enforcement, citing that these unauthorized operations have contributed to recent electrical outages, including a fire at a substation that disrupted power for several districts.