Power Utility Sues Russians Mining Cryptocurrency at Their Homes, Raises Electricity Rates – Mining Bitcoin News

Russian electricity utility found a way of increasing electricity prices to consumers who mine cryptocurrency with household electricity. Some of these cases have already been won by some of the local distribution companies.

The Power Utility is looking for crypto miners who use subsidized electricity to mint digital coins

Irkutskenergosbyt in Russia, which is a distributor of power, managed to increase the tariffs of electricity for private crypto mining farms. It was also able to show in court that the owners of these farms are conducting business and buying electricity at very low prices for their household customers.

This year, 85 cases were filed against individuals involved in home cryptocurrency mining. The claims amount to 73.3 million rubles (over 980,000). According to Kommersant, it has won nine cases and is now expecting 18.7 million rubles (about $250,000). These miners were ordered by the court to continue paying commercial electricity rates.

Power Utility Sues Russians Mining Cryptocurrency at Their Homes, Raises Electricity Rates

Irkutsk is known as the capital for crypto mining in Russia. It has attracted many mining operations due to its low electricity tariffs. Rural residents pay 0.86 rubles ($0.01) for each kilowatt hour (kWh), while small businesses must pay 3.6 rubles (approx. $0.05 per kWh.

Irkutskenergosbyt alone has discovered more than 1000 underground mining sites in 2021. A single miner’s farm was set up in a home and consumed 193,000 kWh per year. This was 22 percent of total consumption for the entire village of Plishkino.

The utility warned that crypto farms such as these can threaten stability of power supplies and could cause accident. After the Sverdlovsk district court filed a lawsuit against the owner, the utility won and the victim had to pay compensation of 7.5million rubles (over $100,000).

Crypto miners may file complaints at the Supreme Court of Russia

The report quotes representatives of both consumer and supplier organizations who have questioned the effectiveness of Irkutskenergosbyt’s case-by-case approach and called for the introduction of differentiated tariffs for cryptocurrency miners. According to the Russian Ministry of Energy, such a decision should form part of national socio-economic policies and be taken at the federal level.

A legal expert says that miners being sued by Irkutskenergosbyt may have the right to appeal to the Supreme Court. Pavel Ganin, partner at a Russian law firm, believes the judicial authority can accept and consider such complaints but it’s unlikely to overturn the decisions of the lower instance courts. However, its interpretations can facilitate the further development of the country’s regulatory framework for the crypto space.

Mining is among those crypto-related activities that remain outside the scope of the law “On Digital Financial Assets,” which partially regulated cryptocurrencies earlier this year. Officials in Moscow, as well as in regions like Irkutsk have begun to call for recognition of the mining industry under Russian law as an entrepreneurial activity in order to tax and regulate its profits.

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What do you think Russia’s plans are for cryptocurrency mining regulation in the future? Please leave your thoughts in the comment section.

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