New York, Thursday, November 07, 2024 – Russia’s Ministry of Energy is moving to ban cryptocurrency mining in certain regions, citing electricity shortages.
Yevgeny Grabchak, Russia’s Deputy Minister of Energy, announced that “state-level” mining bans will likely affect regions struggling with power deficits, such as the Far East and Southwest Siberia, and could remain in effect until 2030.
This crackdown targets areas that have become popular for crypto mining due to their cooler climate and lower electricity costs.
The impending restrictions come just ahead of a new crypto mining law that grants the central government—not regional governors—the authority to impose local mining bans. Although Russian President Vladimir Putin previously endorsed crypto mining, he emphasized that regions should have the right to regulate mining to avoid energy issues.
The ban could significantly impact mining activities in hotspots like Irkutsk, Russia’s unofficial Bitcoin mining capital.
Recently, the Governor of Irkutsk requested a complete mining ban in areas suffering from power shortages, including the Republic of Buryatia and Transbaikalia. Authorities have already launched a series of crackdowns on “illegal” crypto mining, including recent arrests and equipment seizures in Irkutsk and other areas.
Local police report that individuals have been caught connecting to the power grid illegally to support mining rigs. In one case, a resident in Malinovka, Irkutsk, allegedly used an unauthorized connection to power 25 mining rigs, causing an estimated $18,520 in damages to the grid.
Similar incidents are increasing all over the world.
The crackdown has extended to Siberia’s largest city, Novosibirsk, as authorities ramp up efforts to control unauthorized mining.
Observers expect mining operations to shift out of these regions if the ban takes effect, altering the landscape of Russia’s crypto mining industry.
