Russian Power Provider Shuts Down Illegal Crypto Mining Farm with 110 Rigs in Dagestan

Rosseti, Russia power provider, dismantled a large illegal crypto mining operation in Dagestan capital, seizing 110 rigs and investigating damage to the energy grid.

Illegal Crypto Mining Farm Raided in Makhachkala

Russian power firm Rosseti continues its aggressive crackdown on unauthorized crypto mining, seizing 110 mining rigs in a raid on a private home in Makhachkala, Dagestan’s capital. The operation was conducted by Dagenergo, Rosseti’s North Caucasus branch, in collaboration with the Russian Ministry of Internal Affairs Dagestan unit.

Details of the Raid

The raid targeted a house near Lake Vuzovskoye, which had been converted into a makeshift crypto mining facility. Video footage shared on Rosseti’s Telegram channel revealed the house divided into sections, including an engineering lab, a room for mining rigs, and a central control unit.

Officers found modified wiring and an altered electricity meter, allegedly used to siphon power illegally. The seized rigs were shown stacked in a pile as engineers began assessing the damage caused to the regional power grid.

Rosseti stated that the raid was part of a larger investigation to curb energy theft and address the strain on local resources caused by illegal crypto mining.

Ongoing Efforts to Combat Illegal Mining

Rosseti has intensified its efforts in Dagestan, a region with a history of crypto mining due to its low electricity costs. The firm has shut down 28 illegal mining farms in 2024 alone and launched 12 criminal cases against suspects.

In September, investigators discovered a smaller subterranean mining farm with 17 rigs in Makhachkala’s Sergokalinsky District.

The crackdown follows a government-imposed ban on crypto mining during winter months in Dagestan and other Russian regions, effective until 2031. This move comes after public calls for action from Sergey Melikov, the head of Dagestan’s government, citing concerns about energy grid stability.

Implications of Illegal Mining in Russia

Illegal crypto mining has long plagued regions like Dagestan, where cheap electricity attracts operations that often bypass legal channels. These activities strain local energy systems, leading to outages and financial losses for power providers.

The Russian government’s recent measures, including seasonal mining bans and crackdowns, aim to mitigate these issues. However, enforcement challenges persist as miners continue to exploit regulatory loopholes.

Conclusion

Rosseti’s latest operation highlights the ongoing battle against illegal crypto mining in Russia. As authorities ramp up enforcement, the focus remains on protecting the integrity of the energy system and ensuring fair resource distribution.

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