Underground Farms: A Response to Energy Challenges
In the Russian republic of Dagestan, illegal cryptocurrency miners have devised a bold strategy to evade authorities by constructing underground “farms.” These operations tap into electrical grids illicitly, significantly aggravating the region’s ongoing energy shortages. Recent reports from sources, including TASS and local government communications, have highlighted a major police and energy official operation that uncovered these covert mining activities in the capital, Makhachkala.
Raids Uncover Hidden Crypto Operations
A video released by Dagestan’s Cabinet of Ministers showcased the details of a raid where authorities discovered numerous cryptocurrency mining rigs functioning beneath the city streets. Situated several meters underground, these makeshift farms are designed to go unnoticed while exploiting local energy resources.
During this operation, police identified 17 cryptocurrency mining devices located in the Sergokalinsky District. Officials attributed the operation to “energy thieves,” revealing a troubling trend where illegal miners are increasingly resorting to such subterranean setups to secure their activities from detection.
Consequences of Illegal Mining Activities
The infrastructure strain posed by these illicit mining operations has led to severe consequences for the local community. Government officials assert that unauthorized crypto miners were responsible for a fire at the 110 kV Novaya substation, which caused significant power outages across parts of Makhachkala for several days earlier this month. This incident underscores the broader impact of illegal mining on Dagestan’s fragile energy infrastructure.
Collaborative Efforts Against Crypto Mining
In response to the escalating situation, police forces, in collaboration with Dagenergo—the North Caucasus branch of the state-owned power provider Rosseti—are intensifying efforts to clamp down on illegal mining activities. The government has convened meetings to address the pressing issues of energy supply and communal services, with Deputy Prime Minister emphasizing the need for better oversight and regulation of illegal mining practices.
Despite the challenges, officials noted that recent operations have successfully dismantled other unidentified illegal crypto mining farms across the region.
Government Investment in Energy Infrastructure
In a bid to restore stability to the local energy supply, the Dagestan government has pledged roughly 3 billion rubles (approximately $32.5 million) toward repair and enhancement of energy facilities throughout the republic. This initiative aims to mitigate the impact of illegal mining and improve the resilience of Dagestan’s energy grid.
Dagenergo has pointed out that the fire incidents were partly triggered by an alarming spike in electricity consumption, which is directly correlated with the activities of illegal miners. The power provider had previously appealed to these miners, seeking voluntary compliance to cease operations and consider the consequences on the community and essential services.