Russia cracks down hard on illegal Bitcoin mining: power theft farms raided, grid losses continue to grow

On March 11, news reports indicate that Russia is continuing to strengthen its crackdown on illegal mining activities after officially regulating the cryptocurrency mining industry. The latest case shows that authorities in Atamanovka village, Russia, recently seized an illegal mining operation that was stealing electricity from the grid, involving an electricity value of approximately 711,000 rubles (about $9,000).

According to Russian media Arguments and Facts, local electrical workers discovered abnormal damage to a resident’s electric meter during a routine inspection. Further investigation confirmed that the device had been deliberately damaged to conceal ongoing large-scale electricity consumption. Law enforcement ultimately identified an illegal mining setup in Chitinsky District, which was connected privately to the power grid to supply electricity to mining machines over a long period. Although the report did not specify the type of cryptocurrency being mined, those involved face fines and compensation for the electricity company’s losses.

Similar cases are gradually increasing in Russia. Just last month, police arrested a man suspected of illegal mining. Investigations revealed that the man had used a series of secret electrical connections to supply power to numerous mining machines in his property, stealing electricity worth nearly $80,000. Authorities believe such activities not only cause damage to the power grid but may also affect the normal electricity supply to local residents.

Previously, Russian police also dismantled a larger illegal mining farm. Investigators suspect that the farm is connected to a family member of a person who participated in the presidential election campaign. Official estimates suggest that illegal miners in Russia steal electricity worth hundreds of millions of dollars annually.

Despite increasing enforcement efforts, the Russian government does not plan to completely ban the mining industry. In 2025, President Vladimir Putin signed legislation officially allowing cryptocurrency mining within the country, but only legal entities approved by the Ministry of Digital Development can participate, and foreign companies are prohibited from directly operating in Russia.

Russia has long been regarded as one of the world’s key Bitcoin mining regions. According to Hashrate Index, Russia currently contributes over 16% of the global Bitcoin hash rate. Putin stated as early as 2022 that Russia has abundant electricity resources and possesses a competitive advantage in cryptocurrency mining.

As regulatory frameworks are gradually implemented, Russian authorities are trying to support the industry’s development while curbing the impact of underground mining on the power system and local economy. In the future, the regulatory contest between illegal and compliant mining operations may continue.