Russian authorities are using a new spending surveillance system to identify illegal cryptocurrency mining operations in the country.
A more aggressive approach, aided by anonymous signals from residents, has already yielded results, including the recent discovery of a significant underground facility in western Russia.
Cryptocurrency farm burns $700,000 in stolen electricity near Kaliningrad
An entrepreneur from the Russian enclave of Kaliningrad, who was trying to make money by minting cryptocurrencies, was arrested for stealing electricity from the state.
According to preliminary estimates released by the local electricity company, the total economic damage caused by his illegal activities amounted to 56 million rubles (about $700,000).
The company said in a press release that more than 300 pieces of mining hardware were seized from a lucrative mining operation in Kaliningrad Oblast’s Gvardeisky district (near Kaliningrad city).
On Wednesday, the region’s largest energy distribution company, Rosseti Yanter Energosvite, reported its findings to Telegram, saying:
“Violators must compensate for the cost of illegally used electricity. Otherwise, the matter must be resolved in court.”
All materials collected during the investigation and an official report on the energy theft have been submitted to the police, and a post on the popular messenger provides details.
Russian power company investigates electricity usage and identifies cryptocurrency farms
Kaliningrad’s energy supply company said that thanks to a special monitoring program implemented to track consumption, it was able to confirm that the electricity meter at the farm address was bypassed.
Rosetti monitors energy usage to prevent illegal cryptocurrency mining activities, the company said, also cited by Russian business news outlet RBC.
The local distribution company, which is part of the large state-run Rosseti company that integrates regional transmission operators across Russia, further emphasized:
“Illegal electricity consumption not only results in losses for power companies, but also leads to emergency situations due to extreme network loads.”
Rosseti Yantar Energosvayt also called on vigilant citizens to report any suspected energy theft by calling the toll-free number.
Russia is at war with ‘black miners’ from Siberia to Ukraine
The Russian Federation legalized cryptocurrency mining in 2024, making it the first cryptocurrency-related activity to be officially recognized and regulated as a legal business in the country.
However, according to government estimates, less than one-third of operating mining companies have so far registered with the Federal Tax Service as required by law.
Both licensed and unlicensed crypto farms have been blamed for power shortages and grid failures in corners of the country that attract miners with low electricity rates that are often subsidized to citizens.
Around a dozen regions in Russia, from Siberia to occupied Ukraine, have already banned the minting of energy-intensive cryptocurrencies. Winter bans were also implemented in two other regions last week.
Local and federal authorities are waging a full-scale war against illicit cryptocurrency miners and are using the latest technology to meet the challenges in this battle.
As Cryptopolitan reported, in early November, an employee of an electricity company in the Caucasian republic of Dagestan flew a thermal vision drone on wheels attached to the back of a van to locate the elusive farm.
And a few months ago, Rossetti announced that it was working with Russia’s leading mobile phone operators on a mechanism to hunt down such so-called “black miners” by tracking their internet traffic and matching it with other indicators, such as data collected from smart electricity meters.
