How cowboy Bitcoin miners got caught stealing energy from Russian village

Russia is clamping down on dodgy crypto miners after formally regulating the industry last year.

But pirate operations are still going — and locals are suffering as a result.

The latest: Authorities in the village of Atamanovka found a mining operation had stolen 711,000 rubles, around $9,000, worth of electricity from the grid, state-owned Russian media outlet Arguments and Facts reported Monday.

According to the report, energy workers had discovered damage to a metering device in a resident’s home. After investigating, they found a mining operation had been using electricity from the grid in the Chitinsky District.

Reports did not specify what cryptocurrencies the illicit operation had been mining but said the offender would have to pay a fine and damage to the electricity company.

Incidents on the rise

Cowboy mining operations are becoming increasingly common in Russia. Just last month, police arrested a man who allegedly stole $80,000 worth of power from the region’s grid to power his rigs.

The man had allegedly used a series of illegal connections to link his devices to the power grid in an outbuilding on his property, according to authorities.

And last year, cops shut down a sophisticated illegal crypto mining scheme that they suspect had been masterminded by the son of a former presidential candidate.

Russian authorities have said that illegal miners steal millions of dollars of electricity every year.

Mining hotspot

Still, Russia’s government doesn’t want to ban mining, but rather regulate the business.

Last year, President Vladimir Putin signed a law allowing cryptocurrency mining in the country.

The law states that legal entities can only mine if they have been approved by the digital ministry; foreign operations have been banned from doing business in the country.

Back in 2022, Putin said Russia had certain “competitive advantages” in mining crypto due to the country’s electricity surplus.

Russia is a big player in the Bitcoin mining business and currently supplies over 16% of the global hash rate, according to Hashrate Index.

Mathew Di Salvo is a news correspondent with DL News. Got a tip? Email at mdisalvo@dlnews.com.