As an analyst with extensive experience in the crypto industry and a keen interest in global regulations, I find myself both intrigued and concerned by the recent developments in Dagestan regarding illegal crypto mining operations. The discovery of underground crypto mining centers is a testament to the ingenuity and persistence of miners, but it also underscores the challenges that authorities face in maintaining law and order in this rapidly evolving field.
In response to recent regulations on cryptocurrency mining within Russia, local officials have discovered clandestine mining operations for digital currencies in the southern Republic of Dagestan. The regional leader has called upon law enforcement agencies to intensify their efforts to combat these illicit activities, as the region grapples with escalating electricity usage due to these unlawful operations.
Underground Crypto Mining Centers Busted
On Tuesday, Reuters announced that Dagestan officials are advocating for increased action against unlawful cryptocurrency mining facilities in their region. Prime Minister Abdulmuslim Abdulmuslimov urged law enforcement to closely monitor and adapt to the innovative tactics miners employ to stay undetected.
During a gathering focusing on winter readiness plans for energy, homes, and utility infrastructure, the local head disclosed secret strategies used by unlicensed cryptocurrency mining operations. This revelation exposed that multiple mining complexes were found hidden underground.
As an analyst, I’ve noticed a shift in tactics among illicit cryptocurrency miners. Instead of openly operating above ground, they’re now opting to set up their mining farms covertly beneath the surface. This strategy allows them to evade legal scrutiny.
According to the report, the authorities exhibited a video featuring an improvised subterranean cavern in the Sergokalinsky district. The entrance is a concealed, ground-level square opening, accessible via a ladder that continues down to the cave. Upon descent, the authorities discovered more than 15 mining devices, along with numerous fans cooling the computers.
Abdulmuslimov highlighted that this was among multiple secretive cryptocurrency mining operations in the area. Furthermore, he disclosed that miners often utilize “portable setups” for their facilities, making it simpler for them to relocate.
Russia’s New Mining Era
According to Bitcoinist, it has been announced that cryptocurrency mining is now legal in Russia following the signing of a new law by President Vladimir Putin. The aim of this legislation is to provide a legal framework for the industry within the country, thereby promoting innovation while addressing illegal activities.
Starting from November 1, 2024, the newly enacted law permits both registered businesses and individuals to engage in legal activities. Notably, under this new legislation, cryptocurrency miners and mining corporations are granted exclusive privileges for mining operations within the country.
People who keep their energy usage below the thresholds established by the Russian government can legally mine cryptocurrencies, although it’s important to note that unregistered crypto mining farms have faced scrutiny and regulation, particularly in the Republic of Dagestan.
According to a report by The Insider, police raids on cryptocurrency mining facilities have increased noticeably in the region since the end of 2023. Investigations suggest that Dagestan leads Russia in detected cases of electricity theft related to crypto mining. Authorities believe these mining operations are causing electrical issues due to their high energy consumption.
In the end, the Prime Minister of Dagestan instructed authorities to strengthen their actions, claiming that unlawful mining operations were responsible for power outages, such as the recent fire at a substation which left multiple districts without electricity more than a week ago.
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2024-09-25 04:41