Russian Republic Dagestan Battles Underground Crypto Mining Amid Power Outages

Dagestan’s government called for stricter measures against cryptocurrency miners due to their contribution to power outages and attempts to avoid regulations, Reuters reported Tuesday. Local officials said that illegal mining installations, often built underground, have been causing significant strain on the power grid, leading to incidents like a recent substation fire in the capital. Dagestan is a republic in southern Russia, located in the North Caucasus region, known for its ethnic diversity and home to several indigenous groups.

According to local Prime Minister Abdulmuslim Abdulmuslimov, increased attention needs to be paid to the issue of illegal crypto mining. He explained that the miners are constantly finding ways to bypass legal controls, notably by hiding their operations underground. Abdulmuslimov said:

The owners of illegal cryptocurrency mining installations are coming up with new methods of ‘circumventing’ the law – they install mining farms underground.

The government shared footage showing investigators inspecting one such installation, which included multiple cooling fans for the hardware.

Russia’s upcoming cryptocurrency mining legislation, signed by President Vladimir Putin, will take effect on Nov. 1, 2024. This law mandates that cryptocurrency mining companies register with the finance ministry and individuals report their mining activities to the country’s financial monitoring authority.

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