Crypto Miner Convicted in Russia for Allegedly Stealing Power to Mint Digital Coins – Mining Bitcoin News

Two years imprisonment has been handed down by a regional court to a man who illegally connected his crypto farm to the grid. This decision is taken as Moscow authorities prepare to tackle the issue of cryptocurrency mining being illegally connected to the grid.

Illegal Crypto Farm burns 1.3 M kWh in Komi. Russia

A 39-year old resident of Syktyvkar in the capital of Russia’s Komi Republic was found guilty of operating an underground cryptocurrency farm and theft of electricity. This hardware was illegally connected with the nearby transformer station in a building that had been rented from an industry enterprise.

The man ran the mining facility for at least five years, using 1.3 million kilowatt-hours of unpaid electricity to mint digital currencies, the region’s Prosecutor’s Office said in a press release published on Tuesday. According to estimates, the stolen electricity amounts to 5.7 millions Russian rubles (roughly $75,000 as of this writing).

The announcement states that the man, whose identity has not been immediately disclosed, was sentenced to a suspended two-year term with probation for mining activity between 2015 and 2020. He also received a probation of two years. This he acknowledged in court.

Crypto mining is booming across Russia’s energy-rich country, where it has become a lucrative business and a source of income for ordinary Russians. Some local authorities complain that mining is taking place in garages or basements, causing damage to the electric network. The electrical system has been struggling to cope with growing demands.

A power utility in Irkutsk Oblast has brought 85 cases against home-miners this year. The region boasts one of Russia’s lowest electricity rates, $0.01/kWh. According to a recent report, the company has won nine cases and is expecting 18.7 million rubles (or $250,000) of compensation.

There has been a growing demand from officials in Moscow, certain parts of Russia and elsewhere to tax crypto mining and recognize it as an economic activity. Authorities would have the opportunity to tax miners for more energy. The State Duma has a working group that is currently preparing regulations to regulate a variety of crypto-related activities, including mining.

Russian regions were allowed to decide local electricity rates in their residential areas by the federal government. This was done December. Amateur miners will be affected by the move. They’ll have to pay higher prices after reaching a certain threshold of consumption. Because electricity is cheaper, home mining has been so popular.

Is Russia likely to soon ban cryptocurrency mining? Comment below to share your hopes and fears.

Lubomir Tatsev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.