Illegal crypto mining uncovered in Russian prison

Illegal crypto mining uncovered in Russian prison

Illegal crypto mining uncovered in Russian prison

Federal investigations at Butyrka, Russia’s oldest prison, have led to the discovery of crypto mining equipment within a psychiatric clinic.

Reports of illicit crypto mining at the prison emerged late last week through the Russian daily newspaper, Kommersant.

It’s understood that the mining equipment had been installed between November 2021 and February of this year. During that time, the miners consumed 8,400kW of electricity. On this basis, the Investigative Committee suspects that the deputy head of the prison has committed “actions that clearly go beyond his powers, thereby significantly violating the legally protected interests of society or the state”.

There have been numerous cases of theft of energy (or cryptojacking) for the purpose of BTC mining both within Russia and elsewhere over recent years. Last year authorities in Malaysia took action by jailing crypto miners for the theft of electricity and steamrolling the 1,069 miners that had been confiscated.


Blackouts

Crypto mining has proven to be controversial in the Russian Federation as it has often led to power outages. This has been compounded following a crackdown on crypto mining in China in 2021, with a displacement of miners from China into Russia and other countries.

Unregulated miners have caused headaches related to electricity supply beyond Russia also. In 2020, Bitcoin mining was found to be the culprit for rolling blackouts in neighboring Abkhazia. A sudden influx of miners into Kazakhstan put pressure on that country’s aging power grid. This resulted in a spike in energy prices, leading to protests in January and the deployment of Russian troops to restore order.


Legal status

There has been a lot of activity surrounding the legal status of both cryptocurrency and crypto mining in Russia so far this year. Crypto is currently not a legal means of payment in the country. In January, the Russian central bank suggested that both crypto mining and use of digital currency should be made illegal.Within days, the Russian government drafted legislation that classified cryptocurrencies as currency.

There have been ongoing differences between the government and the central bank on the subject. However, comments made last week by Denis Manturov, Russia’s Industry and Trade Minister, suggest that both are moving closer to settling their differences. Additionally, Manturov said that Russia will legalize cryptocurrency as a means of payment sooner or later.

This content is for informational purposes only and is not investment advice. You should consult a qualified licensed advisor before engaging in any transaction.

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