Large illegal crypto mining farm discovered in Daghestan

A major illegal cryptocurrency mining farm has been uncovered and shut down in the village of Khadzhalmakhi, Levashi district, Daghestan, by employees of the energy company Dagenergo. The farm, located on the premises of a former canning factory, housed 89 cryptocurrency mining devices that operated around the clock, placing a significant strain on the local power grid, according to Arsen Gadzhiev, acting head of Dagenergo, who reported the discovery on his Telegram channel.

According to Gadzhiev, the owner of the farm had illegally connected to the Tashkapur substation, causing financial damage amounting to several million rubles. The exact figures are still being determined by specialists, and case materials are being prepared for submission to law enforcement agencies, Gadzhiev emphasised.

This is not an isolated incident in the region. According to the Ministry of Internal Affairs, more than 30 illegal mining farms, including mobile units hidden inside truck trailers, were identified and shut down in Daghestan in 2024.

Additionally, the Russian state-run news agency TASS, citing Daghestan’s Minister of Energy and Tariffs, Marat Shikhaliev, reported that in 2024, illegal mining caused over ₽350 million ($4.2 million) in losses in the republic, with a total of 86 million kW of electricity stolen.

In January 2025, another major illegal mining farm was discovered in the village of Levashi. Authorities seized 169 cryptocurrency mining devices operating in a basement near a sports complex, running on unregistered electricity consumption.

Last week, Gadzhiev reported on an experiment aimed at detecting illegal mining farms. The test was conducted in two villages where residents frequently complain about power outages. As part of the experiment, internet service providers and mobile network operators temporarily shut down internet access, while energy specialists monitored changes in the power load.

‘The results were shocking’, Gadzhiev noted. After the internet was switched off, power consumption dropped by 3.2 MW, equivalent to the operation of approximately 900 mining rigs.

‘To put this into perspective: 3.2 MW is enough to supply electricity to around 1,500 homes. These villages officially have 849 registered households, but the substation serves not only these homes but also illegal mining operations, whose energy consumption is comparable to that of 1,500 houses. This is the reason for the low voltage and frequent power outages’, Gadzhiev explained.

Since 1 January 2025, Daghestan has introduced a ban on cryptocurrency mining operations. This prohibition, which will remain in effect until 15 March 2031, applies to six regions of the North Caucasus.

Daghestan detains 19 employees of major energy supply company

Daghestan detains 19 employees of major energy supply company0:00/4:161× According to state-run media, 19 employees of Dagenergo, a company supplying electric and thermal power to Daghestan, have been detained in the republic on suspicion of embezzlement. The state-run news agency TASS reported…

OC MediaElizaveta Chukharova