Crypto Miner Convicted in Russia for Alleged Power Theft to Mint Digital Coins – Mining Bitcoin News

A district court has sentenced a man accused of illegally connecting his crypto farm to two years in prison. The decision comes as authorities in Moscow prepare to address the lack of proper regulations for cryptocurrency mining, which has become a popular source of income in Russia.

Illegal crypto farm burns 1.3 million kWh in Komi, Russia

The city court in Syktyvkar, capital of Russia's Komi Republic, has found a 39-year-old local resident who ran an underground crypto farm guilty of electricity theft. The hardware was installed in a building rented by an industrial company and illegally connected to the nearby substation.

The man operated the mining facility for at least five years and used 1.3 million kilowatt-hours of unpaid electricity to mint digital currencies, the region's prosecutor's office said in a news release issued Tuesday. The stolen electricity is worth an estimated 5.7 million Russian rubles (almost $75,000 at the time of writing).

According to the notice The man, whose identity was not immediately revealed, was given a two-year suspended prison sentence for his mining activities between 2015 and 2020, which he admitted in court.

In the absence of government-issued rules, crypto mining has spread across energy-rich Russia, not only as a profitable business but also as an additional source of income for many ordinary people. In some regions, local authorities have complained that increased mining in basements and garages has caused damage to the power grid, which is struggling to cope with growing loads.

In Irkutsk Oblast, which has some of the lowest electricity tariffs in Russia at $0.01 per kWh for households, an energy supplier has filed 85 lawsuits against home miners this year. A recent report revealed that the company has already won nine cases, from which it expects to receive 18.7 million rubles ($250,000) in compensation.

Calls for this were increasing among officials in Moscow and certain regions recognize Crypto mining as an economic activity and tax. This would also give authorities the opportunity to charge miners more for the energy they use. A Working group in the State Duma is currently preparing regulations for a range of crypto-related activities, including mining.

In December the federal government may Russian regions to set local electricity tariffs in residential areas. The move is expected to affect amateur miners who will pay more after reaching a certain consumption threshold. Home mining has become so popular primarily because of the cheaper electricity available to the population.

Do you think Russia will regulate cryptocurrency mining soon? Share your expectations in the comments section below.

Lubomir Tassev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens' quote: "Being a writer is what I am, not what I do." In addition to crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.

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