Russian energy companies prepare to ‘hunt’ private crypto miners

Last updated: May 12, 2024 7:30 pm EDT | 3 minutes reading

Russian energy companies are preparing to “hunt” private crypto miners and crack down on people mining cryptoassets at home, a report said on May 12.

The means of communication Izvestia said the Russian Government’s Council of Experts was preparing to submit new mining-related proposals to the Cabinet.

Lawmakers want to group the proposed measures into a new package of cryptographic laws. These laws also aim to legalize industrial crypto mining and ban most national exchanges.

Crypto miners: Russian energy companies will ‘hunt’ offenders

The media outlet reported that the council will send written proposals, which its reporters have already seen, to the Council of Ministers on May 16.

The documents propose using electricity meter technology to identify mining suspects. Data analysts will “compare declared readings to actual electricity usage” using “remote verification solutions.”

The document also explains how energy companies will fine “illegal” miners. The document proposes allowing energy companies to charge home violators with “higher rates”.

These fees are normally reserved for “industrial companies”.

Energy companies will gain more powers

Dmitry Tortev of Russia’s Federal Antimonopoly Service told the media outlet that the measure would allow energy suppliers to act without needing to go through the legal system. He said:

“Currently, electricity providers must provide evidence of violations related to crypto mining in court. This wastes these companies’ time and money. However, if a unified system of fines is developed at the federal level, this will accelerate and intensify the fight against [illegal crypto mining].”

Crypto mining remains extremely popular in Russia. But as the activity currently has no legal status, coin mining is currently neither illegal nor legal.

Private mining is also not illegal, and currently Russian energy companies can only intervene if suspect that individuals are stealing energy from local networks.

A Russian domestic cryptominer shows off his equipment. (Source: ProMining/YouTube)

Overloaded systems, providers say

The documents reportedly lament that the Russian energy system is “overstretched” in many areas.

The authors claim that this is resulting in “interruptions in the supply of electricity to consumers”. The document allegedly states:

“In some regions, there was a significant increase in electricity consumption, [often] due to the increase in mining loads. This led to […] local deficits in the southeastern part of the […] Siberia.”

The authors of the documents also said that the shortage was reported “in the Irkutsk-Cheremkhovo district, in the Irkutsk regionthe southern part of Buryatia and certain parts of the Trans-Baikal region.”

These are well-known crypto mining hotspots popular for their low power rates and cold winters.

Irkutsk, in particular, has become a center for mining, both legal and illegal, in recent years. This led the region to develop a somewhat complicated relationship with mining.

An engineer working in a Russian industrial crypto mining data center. (Source: Nastoyashee Vremya Syuzhetiy/YouTube)

Izvestia also quoted Deputy Energy Minister Pavel Snikkars as saying that energy tariffs for miners should “increase in order to encourage them to move away from energy-deficient areas.”

The same ministry has already presented proposals aimed at reducing pressure on overloaded networks.

One of them included forcing industrial miners to shut down their rigs at certain fixed times of the year.

Although these were met with dismay by most miners, most industrial miners They want Moscow to “hurry up” and legalize their sector.

While this would mean they would have to start paying taxes on their income, the biggest companies want legal clarity from Moscow before they do so. more investments related to the data center.

Sergei Bezdelov, head of the Industrial Mining Association, said:

“We have a positive attitude towards any measures aimed at creating conditions for the development of industrial mining in this country. We would be happy to request inspections from energy suppliers if this is desirable. This will help bring legitimacy to this sector in Russia.”

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