Connect with us

Hi, what are you looking for?

Economy

Russian Crypto Miners Blamed for Siberia Power Outages

Russian power providers say crypto miners are to blame for “mass” electricity outages during recent cold snaps.

Per Interfax, Rosseti Siberia, the local branch of the state-run power provider Rosseti, “recorded an increase in the volume of illegal mining at the end of 2023 in a number of regions of Siberia.”

Rosseti Siberia claimed that this spike in activity had caused over $675,000 worth of damage.

The firm also claimed miners for an increase in the “occurrence of failures and accidents on networks during recent mass outages.”

Several Siberian regions reported power problems in mid-December when temperatures fell to unseasonal lows.

Rosseti Siberia added that it had closed down 17 “illegal” crypto mining farms in the territory in the past 12 months.

The provider said it had closed “illegal” data centers operating in the Krasnoyarsk, Omsk, and Khakassia regions.

These areas become hotspots for crypto miners. Several major Russian industrial crypto mining firms have set up centers in Siberia in the past decade.

An industrial crypto mining center in Siberia’s Krasnoyarsk. (Source: Sibmain/YouTube)

Uncertain Future for Russian Crypto Miners?


Russia’s crypto mining industry remains in a precarious position. Cheap electricity and low winter temperatures have led to a huge rise in industrial mining in Siberia.

Industry insiders claim that Russia’s mining industry is now second only in size to that of the United States.

Top miners like Igor Runets, the CEO of BitRiver, claim that following April’s Bitcoin halving event, Russian mining profitability could eclipse that of the US by thousands of dollars per coin.

Igor Runets, the CEO of the mining firm BitRiver. (Source: The CEO Magazine/YouTube)

While some Russian lawmakers think the nation has much to gain from fostering the crypto mining industry, power providers are worried about strains on their networks.

Miners in nearby states such as Georgia, Kazakhstan, and the de facto nation of Abkhazia have been blamed for years of electricity-related issues.

Rosseti also claimed that mining could be “dangerous” for the operation of energy systems. The firm said:

“Our checks have shown that illegal consumption of electricity, including for [crypto] mining purposes, played a significant role in causing failures and accidents on networks.”

Mining has no legal status in Russia, a fact that industrial mining firms have been urging Moscow to redress for years.

However, politicians and regulators seem to be divided on the matter. The Central Bank has previously backed a ban on all forms of crypto-related activity, including mining.

In recent years, it has walked back these calls. Instead, it now calls for industrial miners to operate in a strict regulatory environment.

The bank also wants to force miners to sell their coins on international crypto exchange platforms.

Law enforcers have hit out at this plan, however, claiming that this could lead to a rise in money laundering.

Ministers propose banning private citizens from mining crypto, but allowing industrial miners to operate.

The energy ministry, which urgently wants to legalize industrial mining, recently suggested forcing industrial miners to pay higher electricity tariffs.

A mining industry body has rejected this claim, however, stating that this would likely lead to a rise in “hazardous” illegal mining.

Russian Trade Ministry ‘Develops Tool That Lets Crypto Miners Evade Sanctions’

Russia’s trade ministry has developed a tool to help crypto miners evade Western sanctions.#CryptoNews #Russia #newshttps://t.co/nlfDfzoGaS

— Cryptonews.com (@cryptonews) November 15, 2023

A ‘Third Way’ Emerges for Russia’s Crypto Mining Conundrum?


Izvestia reported that a new paper from the Moscow-based National Research University Higher School of Economics has proposed another solution.

This would involve the forced “disconnection” of crypto miners “from the electrical grid” for “500 hours per year.”

The National Research University Higher School of Economics in Moscow, Russia. (Source: JamesSmith.HSE [CC BY-SA 4.0])This would mean that miners would need to power down their grids for almost 21 days. The paper was sponsored by Russia’s top mining industry group, whose director Sergei Bezdelov told Izvestia:

“Miners are ready to compromise. […] This move could suit everyone.”

The government has yet to comment on the paper. But the First Deputy Chairman of the State Duma’s Committee on Energy Valery Seleznev was quoted as expressing support.

The media outlet wrote that in Seleznev and Bezdelov’s opinion, “miners are not fussy, and can safely disconnect from the network if given prior warning.”

The post Russian Crypto Miners Blamed for Siberia Power Outages appeared first on Cryptonews.

Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest

Economy

The Pepe (PEPE) price pumped up 30% on Monday, with investors flooding back into the meme coin amid a surge in risk-taking activity across...

Economy

OTC crypto crime appears to be on the rise in South Korea, where police say they have arrested a “multinational gang” who allegedly locked...

Economy

The newly launched nine Bitcoin exchange-traded funds (ETFs) in the U.S. have broken an all-time daily record in volume, taking in $2.4 billion which...

Economy

The price of the leading cryptocurrency Bitcoin rallied over 10% to soar above $57,000 for the first time since November 2021. The price rally...

Economy

The U.S. Republican senators have introduced a bill aiming to ban Federal Reserve-backed central bank digital currency (CBDC). As reported by The Hill, this...

Economy

The Financial Stability Board (FSB) will deliver reports on asset tokenization and AI later in 2024, according to Chair Klaas Knot. FSB Chair @KlaasKnot...

You May Also Like

Financial Advisors

[#item_full_content]

Financial Advisors

[#item_full_content]

Financial Advisors

The humongous outbreak of the dreaded coronavirus has brought about a groundbreaking change in what the world perceived as ‘normal’. With an estimated 280,391,189...

Disclaimer: Respect Investment.com, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2024 Respect Investment. All Rights Reserved.