Russia’s Dagestan Discovers Illegal, Subterranean Crypto Mining Farms

Tim Alper is a British journalist and features writer who has worked at Cryptonews.com since 2018. He has written for media outlets such as the BBC, the Guardian, and Chosun Ilbo. He has also worked...

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September 25, 2024 23:00 EDT

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Per TASS and a Telegram post from the Dagestan’s Cabinet of Ministers, police officers and energy officials raided a subterranean crypto mining hideaway in Makhachkala, the republic’s capital.

Dagestan Battles Illegal Crypto Miners Amid Energy Woes

The cabinet released a video of the raid. This appears to show banks of crypto mining rigs operating in a tiny space several meters under the ground.

Equipment in a suspected underground crypto mining “farm” in Dagestan. (Source: Dagestan Cabinet of Ministers/Telegram/Screenshot)Police said they discovered “17 cryptocurrency mining devices” underground in the city’s Sergokalinsky District.

Officers also said that the farm was run by “energy thieves.” The cabinet claimed that miners have “begun to create underground farms” and “mobile mining units” in several parts of Dagestan.

The cabinet added that “illegal cryptocurrency miners” were responsible for “a fire at the 110 kV Novaya substation.”

This incident, which occurred earlier this month, left “part of the capital without power for several days,” the cabinet noted.

An investigator examines a suspected illegal crypto mining “farm” in Dagestan. (Source: Dagestan Cabinet of Ministers/Telegram/Screenshot)Police have been working with Dagenergo, the North Caucasus branch of the Russian state-owned power provider Rosseti.

The republic’s government has been discussing a response at a meeting on energy and communal services.

“The Deputy Prime Minister noted that more attention should be paid to the issues of combating illegal mining in the republic. Illegal cryptocurrency miners are coming up with new methods of ‘circumventing’ the law. They are doing this by installing their farms underground.”

Dagestan Cabinet of Ministers

Government to Spend $32.5 Million on Repairs

The cabinet hinted that Dagenergo and the police have shut down other, undisclosed, illegal crypto mining “farms” in the republic of late.

The Dagestan government has announced it will spend “about 3 billion rubles ($32.5 million)” on “repair work at energy facilities in the republic.”

Ukrainian President Volodymyr Zelenskiy told the United Nations Security Council that the war between Russia and Ukraine cannot be calmed by talks alone, but that Moscow must be forced into peace pic.twitter.com/kmFaa3PLPF

— Reuters (@Reuters) September 25, 2024

Dagenergo confirmed that the substation fire was caused by a sharp “increase in electricity consumption.”

Earlier this year, Dagenergo implored miners to “kindly” “turn off” their rigs. The power provider begged illegal miners to “think about their loved ones and neighbors.”