Underground Crypto Mining Sparks Power Crisis in Russia’s Dagestan

It has been suggested that illegal crypto mining activity, which is an epidemic in Dagestan, Russia, has migrated to underground facilities, along with stealing electricity from power systems.

As TASS and the Telegram channel of the Dagestan Cabinet of Ministers reported, law enforcement and energy officials raided a crypto mining site covertly beneath the ground in the republic’s capital, Makhachkala.

Dagestan Cracks Down on Illegal Crypto Mining

A clip of the cabinet can display many levels of crypto mining machines operating in a small space about several meters under the ground.

Law enforcement officials reported that authorities in Dagestan had found 17 crypto-mining devices concealed underground in the Sergokalinsky District of Makhachkala.

The operators were described as ‘energy thieves,’ while the Dagestan Cabinet of Ministers reported that illegal miners have begun developing ‘underground farms’ and ‘mobile mining units’ all over the region.

The cabinet also explained the recent blaze at the 110 kV Novaya substation and attributed it to illegal crypto mining and the resulting excessive power consumption. As mentioned by the Dagestan Cabinet of Ministers, the incident at the 110 kV Novaya substation earlier this month left some parts of the capital without power for several days.

Collaboration Between Local Authorities and Dagenergo

It follows that local police have been working with Dagenergo (the North Caucasus branch of Russian state-owned power company Rosseti) to stop illegal mining activity.

The republic’s government has taken the issue seriously and has held sessions to find answers to the problem. They have focused on measures to minimize energy losses and protect public utility services.

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The Deputy Prime Minister of Dagestan acknowledged the need to fight illegal crypto mining in the country, stating that the miners’ hiding techniques have become more advanced. In the officer’s words, such exercises are now being carried out underground to avoid the operation of the same terms.

Crackdown on Illegal Cloud Mining Facilities

The increase in violation cases by inland hand-in-hand miners led the Dagestan Cabinet of Ministers to call for more punitive measures.

The Dagestan government observed that recently, the police and Dagenergo have put down more undisclosed illegal cloud mining facilities across the republic.

The Dagestan government is responding to growing concerns by declaring investments of about 3 billion rubles ($32.5 million) to repair and modernize the region’s energy system. Dagenergo confirmed that the newest substation fire was caused by overzealous electricity consumption, which is common during illegal mining activities.

Earlier in the year, Dagenergo issued a warning to illegal miners because their activities were threatening to get out of control. They requested the illegal miners to “Please” turn off the rig and think for their families and neighbours.

Conclusion

Conscious of the increasing threat of the illegal mining of cryptocurrencies, Dagestan’s authorities are also intensifying measures to safeguard the region’s energy infrastructure development. The government’s substantial financial commitment to seeking repairs and reinforcing measures against the illegal miners emphasizes the efforts to thwart rogue activities that waste natural resources and pose a danger to members’ safety.

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