Russian power company Rosseti has reported losses of more than $14 million (1.3 billion rubles) in 2024 due to illegal cryptocurrency mining operations. The practice not only caused economic damage but also clogged the power grid, damaged equipment and led to a series of criminal investigations.
Serious damage and heavily affected areas
According to the report, the most severely affected regions include the North Caucasus, Novosibirsk and the Volga region. In total, authorities have detected 130 cases of illegal cryptocurrency mining, causing grid overloads and voltage drops in many residential areas.
Mining farms were found in a variety of locations, from warehouses, underground parking lots to temporary containers on rented land. One of the most serious incidents took place in Novosibirsk, where authorities discovered 3,200 mining rigs operating illegally, causing losses of up to $2.1 million (197 million rubles).
A heavy-handed crackdown by authorities
In response to this situation, Rosseti coordinated with law enforcement agencies to conduct a large-scale crackdown, resulting in more than 40 criminal cases and many arrests. This is considered a strong move by the authorities to control the growing illegal cryptocurrency mining in Russia.
The main reason for the boom in illegal mining is the high cost of electricity combined with legal restrictions. Many miners have sought to avoid expensive energy costs by stealing electricity from the national grid, causing serious losses for the energy sector.
Prospects for Tighter Regulations in the Future
With increased government oversight, Russia may soon impose tighter controls on the cryptocurrency mining industry. This is especially important as the global cryptocurrency market grows rapidly and Bitcoin becomes more widely adopted.
Tightening regulations will not only help protect the country’s electricity infrastructure, but also limit the negative impacts of illegal mining activities, contributing to the stability of Russia’s financial and energy systems as the cryptocurrency market continues to expand.
