The Russian power provider Rosseti has escalated its crackdown on illegal cryptocurrency mining, seizing 110 mining rigs during a major raid in Makhachkala, the capital of Dagestan. Conducted by Rosseti’s North Caucasus branch, Dagenergo, in collaboration with the Russian Ministry of Internal Affairs, the operation uncovered a large, illicit crypto mining farm hidden within a private residence near Lake Vuzovskoye.
A Makeshift Mining Operation
According to a statement released on Rosseti’s Telegram channel, the house had been divided into specialized sections for crypto mining. Footage from the raid revealed makeshift engineering labs and rooms housing rows of mining rigs. The house also featured a central control center with tampered electrical meters, designed to mask the high electricity consumption associated with crypto mining.
Rosseti disclosed that the illegal farm was directly connected to the regional power grid, potentially causing extensive damage to Dagestan’s energy system. Engineers are currently evaluating the financial and infrastructural impact of the operation.
Ongoing Investigation and Crackdown
Dagenergo has reported 28 similar raids on illegal mining operations in 2024, leading to 12 criminal cases. In September, investigators discovered a 17-rig mining farm operating covertly beneath Makhachkala’s Sergokalinsky District.
Russia’s recent ban on crypto mining during winter months in Dagestan and other regions—effective until 2031—aims to address the surge in unauthorized operations that drain energy resources. The restrictions follow public calls from Sergey Melikov, the head of Dagestan’s government, for stricter measures against illegal miners.
Energy Theft and Rising Risks
Illegal crypto mining farms exploit subsidized energy rates in Russia, often causing power outages and energy shortages in affected regions. Rosseti’s proactive efforts reflect the government’s broader push to curb energy theft while promoting legal crypto mining activities under regulated conditions.
With criminal investigations underway, the seizure of 110 rigs marks one of the largest busts of 2024 and highlights the ongoing battle between authorities and illegal operators.
