Russia's Crackdown on Cryptocurrency Mining

Moscow (Reuters) – Russia's southern republic of Dagestan is calling for stricter measures against cryptocurrency miners who are reportedly causing electricity outages and evading the law by building illegal underground mining operations.

Cryptocurrency miners have faced increasing scrutiny globally, as the hardware used for mining consumes significant amounts of electricity and operates continuously.

Dagestan's local prime minister, Abdulmuslim Abdulmuslimov, emphasized the need for greater attention to illegal mining activities, noting that a recent fire at a substation in the capital was linked to spikes in electricity consumption from miners.

"The owners of illegal cryptocurrency mining installations are coming up with new methods of 'circumventing' the law – they install mining farms underground," Abdulmuslimov stated.

The Dagestan government has released video evidence of investigations into an underground mining operation, where dozens of cooling fans were found supporting the computers.

New legislation regarding cryptocurrency mining, signed by President Vladimir Putin, is set to take effect under specific conditions starting November 1, 2024. A special register will be created by the finance ministry to monitor companies involved in cryptocurrency mining, while individuals will be required to report their activities to Russia's financial monitoring regulator.