An unnamed electric grid company in Irkutsk, a region in Siberia known for its crypto mining activity, has been accused of leasing state-owned land to cryptocurrency miners, who set up an illegal “mining farm” on the plot. This revelation was made public by the Irkutsk Region Prosecutor-General’s Office in a post on the Russian social media platform VK.
Power Provider Leased State Land for Crypto Mining
The prosecutors stated that the plot in question had been designated by the state for public utility purposes. However, instead of using the land for its intended purpose, the power provider allegedly leased it to crypto miners who constructed a mining facility there.
As a result, the company was fined 330,000 rubles (approximately $3,120) and censured by the authorities. Additionally, an administrative case has been opened against the company in connection with the unauthorized leasing of state property for crypto mining operations.
Russia’s Ongoing Illegal Mining Problem
This case highlights the continuing issue of illegal crypto mining in Russia, particularly in regions like Siberia, where cheap electricity and cold winters provide ideal conditions for large-scale mining operations. However, this has led to significant power shortages and instability in the region’s energy grid. Irkutsk has been especially affected, with crypto miners blamed for causing power outages and straining the local infrastructure during winter months.
In response to these concerns, the Russian government has implemented temporary crypto mining bans in several Siberian regions to reduce the pressure on the power grid. Despite these efforts, illegal mining operations have persisted, with many miners finding ways to circumvent the restrictions. Irkutsk authorities have been particularly focused on cracking down on these illegal activities.
New Alternatives for Crypto Miners in Russia
While some regions of Siberia are struggling with the issue of illegal mining, there are efforts underway in other parts of Russia to create new crypto mining hotspots that could satisfy both the demand for cheap energy and the needs of miners. For example, in Zavodoukovsk (Tyumen region), a developer has listed a Bitcoin mining farm for sale. The farm, located on a 20-acre plot with a 550 sqm building, includes 40 ASIC mining rigs and a 150 kWh power supply. According to the vendor, the farm is capable of mining BTC 0.266 per month, and it is priced at around $95,000.
In addition, another farm in the same region is available for $143,000, with the vendor promoting these properties as ready-made crypto mining facilities for prospective miners. Power costs in the area are reported to be around $0.02 per kWh, which is significantly lower than typical rates for commercial electricity.
Emerging Mining Hotspots Outside Siberia
Other regions in Russia are also positioning themselves as attractive locations for crypto mining. The Komi Republic is one such example, where the regional government has been working to establish new data centers. Governor Vladimir Uyba revealed in September that two new data centers were under construction in Mikun and Sindor, part of a larger plan to build 15 centers in the region.
Additionally, there are reports that Gazprom, Russia’s state-owned gas giant, is building a large-scale crypto mining facility in the historic city of Veliky Novgorod, approximately 570 km northwest of Moscow. This facility, expected to house 5,000 mining rigs, is set to reach full capacity by 2028, with a reported budget of $452.4 million for its development.
Eastern Siberia Still a Focus for Mining Firms
Despite efforts to diversify crypto mining activities across the country, many Russian firms continue to focus on Eastern Siberia due to its favorable conditions. For instance, BitRiver, Russia’s largest industrial mining company, is constructing a new 100 MW data center in Buryatia, a region in Eastern Siberia. The new center is expected to become the largest data center in the Republic of Buryatia and the Far Eastern Federal District.
Conclusion
The case of the unnamed Irkutsk power provider leasing state land to crypto miners underscores the challenges Russia faces in regulating its booming crypto mining industry. While the country is making strides to establish new mining hubs outside traditional regions like Siberia, illegal mining operations continue to create tension between the mining industry, local power grids, and regulatory authorities. As Russian officials continue to crack down on illegal mining, the country will need to find a balance between fostering innovation in the crypto sector and addressing the strain it places on the national infrastructure.
