13 May

Russian energy companies are reportedly gearing up to crack down on private cryptocurrency miners and individuals mining cryptoassets at home, as per a report on May 12 by the media outlet Izvestia.

The Russian Government Expert Council is said to be drafting new proposals related to mining, which will be submitted to the Cabinet. These proposals are intended to be included in a new package of cryptocurrency laws. Among these laws is a plan to legalize industrial cryptocurrency mining while prohibiting most domestic exchanges.

Russian Energy Companies to "Hunt" Crypto Miners

The news organization reported that on May 16, the council will submit written recommendations to the Cabinet, which its correspondents have previously seen.

According to the documents, suspected miners might be identified by employing electrical meter technology. Using "remote checking solutions," data analysts will "compare declared readings with actual electricity usage."

The memo also describes how mining companies will penalize "illegal" miners. According to the proposal, electricity providers should be able to charge domestic offenders "higher rates."

Generally, "industrial enterprises" are the only ones eligible for these rates.

Energy Businesses Will Become More Powerful

Power companies would be able to take action without having to go through the legal system, according to Dmitry Tortev of the Russian Federal Antimonopoly Service, who spoke with the media source. He declared:

Currently, electrical providers must produce documentation in court attesting to infractions linked to cryptocurrency mining. That is a waste of money and time for these companies. Nonetheless, the federal government's development of a uniform system for sanctions will hasten and bolster the campaign against [illegal crypto mining].

In Russia, cryptomining is still very popular. However, mining currencies is currently neither lawful nor illegal because the activity does not currently have a status. Private mining is also lawful, and Russian electricity companies can only intervene at this time if they believe someone is pilfering electricity from nearby grids.

Providers Cite Overloaded Systems

According to the documents, the Russian energy grid is "overloaded" in a lot of ways.

According to the document, there are "interruptions in the supply of electricity to consumers" as a result, according to the writers.

"Electrical energy consumption has significantly increased in some regions, [often] as a result of increased mining loads." As a result, there are now [..] local deficiencies in the southeast of Siberia.

The writers of the documents added that shortages had been reported in "parts of the Trans-Baikal, the southern part of Buryatia, and the Irkutsk-Cheremkhovo district of the Irkutsk region."

These regions are recognized as crypto mining hotspots due to their low electricity costs and cold climates, which are conducive to mining operations.

Irkutsk, in particular, has emerged as a prominent mining hub, attracting both legal and illegal mining activities in recent years. Consequently, the region has developed a somewhat complex relationship with mining, balancing the economic benefits against potential regulatory concerns and environmental impacts.

Izvestia also reported Deputy Minister of Energy Pavel Snikkars as suggesting that energy tariffs for miners should be adjusted to incentivize them to relocate from energy-deficient regions.

The Ministry of Energy has previously put forth proposals aimed at alleviating strain on overloaded networks. One proposal involves requiring industrial miners to power down their rigs for certain predetermined periods throughout the year.

While these proposals have been met with dissatisfaction by many miners, most industrial miners are eager for Moscow to expedite the legalization of their sector.

The largest companies want legal clarification from Moscow before they make more investments related to data centers, even if this would mean they would have to start paying taxes on their earnings.

The head of the Industrial Mining Association, Sergei Bezdelov, stated:

"Any action intended to foster the growth of industrial mining in this nation is welcomed with open arms. If it would be preferred, we would be pleased to allow power companies to conduct inspections. This will contribute to this industry's respectability in Russia."

May 2024, Cryptoniteuae

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