Russia Cracking Down on Crypto Miners Minting in Residential Areas – Deputy Minister of Energy Pavel Snikkars revealed to the Russian press that electricity distribution companies in Russia have begun to recognize improvised mining farms in residential buildings by the increased volume of energy consumption and higher loads on the grid at substations.
The official told the daily Izvestia that authorities are pursuing “illegal miners.” While crypto mining has not yet been regulated and such activities are not officially prohibited at this time, utilities can demonstrate in court that these consumers are not using the electricity for household purposes.
According to attorneys interviewed by the publication, suppliers have been able to compel home miners to pay the difference between the favorable tariffs for the general public and the higher rates that businesses are compelled to pay in at least 10 instances.
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When increased power consumption triggers their suspicions, the utilities would initially send an inspector to check and issue a new invoice based on the price of electricity used for commercial purposes, Snikkars explained. Eventually, they could try to prove their claims in court.
Irkutskenergosbyt, the electricity distributor in the energy-rich region of Irkutsk dubbed “the mining capital of Russia,” was among the first to deal with the issue in 2021. According to a report in August of this year, crypto miners in the Siberian oblast, where rates start at just $0.01 per kWh in rural districts, have already paid 100 million rubles in fines (almost $1.7 million at the time).
Pavel Snikkars revealed last week that Russia anticipates a substantial increase in the proportion of cryptocurrency miners to its total electrical power usage. Additionally, he noted that home mining is a significant issue in locations where the infrastructure cannot handle the loads, and that energy firms have taken steps to secure stable supply for other consumers.
According to Oleg Ogienko, director of government relations at Bitriver, one of Russia’s major mining farm operators, around 1.7 GW of electricity is required for crypto mining in Russia, of which 50 – 60% is used by the industrial sector.
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Mining is one of the crypto-related industries that the Russian government wishes to legalize and regulate in order to capitalize on the country’s competitive advantages in the industry, such as its inexpensive energy resources and cold environment.
In November, a group of legislators introduced a measure in the lower house of parliament to control the minting of digital currencies such as bitcoin by amending the country’s existing “On Digital Financial Assets” law. The Bank of Russia supported the law, and it is anticipated that it will be implemented by the end of the year.
