Dagestan Targets Illegal Cryptocurrency Miners Amid Power Issues

Cryptocurrency Mining Challenges in Dagestan

Dagestan faces significant challenges with illegal cryptocurrency mining activities, which have led to electricity outages in the region. The local government has expressed concerns over the increasing power consumption attributed to these operations. Cryptocurrency miners use specialized hardware that operates continuously, consuming large amounts of electricity.

Underground Mining Installations

In response to regulatory scrutiny, some miners have resorted to installing their operations underground to evade detection. These underground installations have become a focus for Dagestan authorities, particularly after a fire at a power substation in the capital. This incident highlighted the risks posed by the excessive energy consumption of illegal mining setups.

Government Measures and Legislation

Dagestan's government is ramping up efforts to combat illegal crypto mining. Officials are actively inspecting suspected mining sites, including makeshift underground caverns equipped with multiple cooling fans for the hardware. The region's local prime minister, Abdulmuslim Abdulmuslimov, emphasized the need for stricter measures to address these clandestine activities.

Upcoming Cryptocurrency Mining Regulations

To regulate this burgeoning industry, new cryptocurrency mining legislation will be implemented in Russia starting November 1, 2024. The legislation, signed by President Vladimir Putin, requires the finance ministry to maintain a register for companies involved in cryptocurrency mining. Additionally, individuals engaged in mining must provide specific information to Russia's financial monitoring regulator to ensure compliance.

Dagestan's actions reflect a broader global trend of increased scrutiny on cryptocurrency mining, as regions seek to balance technological advances with sustainable energy use and legal compliance.