In Siberia, Russian police have conducted raids on four large “illegal” data centers, seizing over 3,200 crypto mining rigs. The operators of these mining centers have been charged with criminal offenses. The power provider Rosseti stated that the centers were part of an interconnected “network” operating in different parts of the city of Novosibirsk. It is estimated that the miners stole approximately $2.1 million worth of electricity from the Novosibirsk grid. Police confiscated nine power transformers and 3,225 cryptocurrency mining devices during the raids, effectively shutting down the operations of all four crypto farms at once.
Authorities in Novosibirsk found that these illegal mining farms were equipped with modern power equipment but were not using legal connections to power grids. They were involved in electricity theft on an industrial scale. The police conducted simultaneous raids on facilities near a wastewater treatment plant, in a forest on the outskirts of the Leninsky District, near a city landfill on the left bank of the River Ob, and in a private sector area in the Kalininsky District. Charges have been pressed against the operators and they could face jail time if convicted.
The crackdown on illegal crypto mining is not limited to Novosibirsk, as similar operations have been targeted in other regions of Russia as well. In Irkutsk Oblast, a 217-rig mining farm was shut down in late March, with a 35-year-old man charged with stealing $11,000 worth of power. In 2023, Rosseti and local police shut down 17 “illegal mining farms” in the cities of Krasnoyarsk, Omsk, and Khakassia. Further raids were carried out in the Krasnoyarsk Territory and Khakassia, as well as the Omsk Oblast. The fate of the industrial mining industry remains uncertain in Moscow, where miners are willing to pay taxes on their income to support national IT projects but are facing delays in legislation approval.
Marathon Digital CEO Fred Thiel expressed excitement for Bitcoin’s halving and discussed the state of Bitcoin mining and Marathon’s growth strategy on Bloomberg Crypto. In a recent development, a Russian court rejected Google’s appeal against a $49.4 million fine for failing to delete what Russia considers fake information about the war in Ukraine. The fine was calculated as a share of Google’s annual turnover in Russia. The situation reflects the ongoing challenges faced by foreign companies operating in Russia, particularly in terms of compliance with local regulations and censorship laws.
The rise of illegal crypto mining activities in Siberia and other regions of Russia has prompted law enforcement and energy providers to crack down on such operations. The discovery of unauthorized mining farms with hundreds of rigs and significant power theft highlights the challenges faced by authorities in regulating the cryptocurrency industry. The ongoing raids and shutdowns of illegal mining farms demonstrate the government’s efforts to combat electricity theft and ensure compliance with regulations. As the industry continues to evolve and expand, it is crucial for miners to operate within the legal framework to avoid potential legal consequences and contribute positively to the national economy.
