Moscow, Russia – Russian energy provider Rosseti has reported a significant financial loss of 1.3 billion rubles ($14.2 million) in 2024 due to illegal cryptocurrency mining operations across multiple regions. The losses stem from unauthorized electricity consumption, prompting law enforcement action and raising concerns about the strain on the country’s power grid.
Widespread Illegal Mining Operations
According to a Feb. 18 report by Russian media outlet Tass, Rosseti attributed the financial hit to illicit electricity usage across several regions. The worst-affected areas include:
- North Caucasus Grid: Accounted for 600 million rubles ($6.6 million) in losses.
- Novosibirsk, Center, and Volga Regions: Totaled 520 million rubles ($5.7 million) in unauthorized consumption.
One of the largest illegal mining operations was discovered in Novosibirsk, where authorities seized 3,200 mining devices from an unauthorized facility. This single operation resulted in an estimated loss of 197 million rubles ($2.2 million).
In total, Rosseti has uncovered 130 cases of unauthorized grid connections linked to crypto mining. These cases have been handed over to law enforcement, leading to over 40 criminal investigations. Those responsible could face legal action under Russia’s criminal code for electricity theft and infrastructure damage.
Rosseti Warns of Grid Instability
Rosseti has issued a warning about the dangers of illegal crypto mining, stating that unauthorized electricity consumption can:
- Overload the power grid, leading to supply disruptions.
- Lower voltage levels, impacting industrial and residential users.
- Damage electrical infrastructure, increasing maintenance costs.
The company has emphasized that unregulated mining threatens both its infrastructure and everyday consumers, urging authorities to tighten monitoring and enforcement.
Rosseti’s Plan for Legal Bitcoin Mining
Despite the crackdown on illegal mining, Rosseti has expressed interest in legitimate Bitcoin mining projects as a way to optimize energy usage and boost revenue. The company is exploring the establishment of mining facilities in regions with surplus electricity, aiming to monetize excess power rather than losing it to unauthorized consumption.
This move aligns with Russia’s evolving regulatory stance on crypto mining. In 2024, demand for industrial mining equipment tripled, driven by a new regulatory framework that provides legal clarity and recognizes digital assets as taxable property.
Russia’s Crackdown on Unauthorized Mining
While Russia has become a key player in the global crypto-mining ecosystem, authorities are stepping up efforts to track and eliminate illegal mining operations. Regulators are pushing for a nationwide registry of mining equipment, aiming to curb electricity theft and ensure proper taxation of mining activities.
As the battle against unauthorized mining intensifies, Rosseti’s dual approach of enforcing strict anti-theft measures while investing in regulated mining operations could help stabilize the energy sector and strengthen its financial position.
