The energy company Rosseti (Russian power grids) North Caucasus has reported uncovering three illegal cryptocurrency mining farms in the village of Maidanskoye in Central Daghestan.
The company’s press service announced the discovery on its official Telegram channel on Monday. According to the company, the total damage caused by the illegal operations amounts to several million rubles.
The largest of the farms was reportedly located in an orchard and consisted of 68 cryptocurrency mining devices. To conceal the increased power consumption, the owner allegedly placed a magnet on the electricity meter.
‘The volume of stolen electricity amounted to 440,000 kilowatt-hours. The damage to the power grid complex exceeded ₽1.2 million ($15,000)’, the company’s statement said.
A second mining installation, equipped with 14 mining devices, was discovered on the grounds of a local farm. According to the energy provider, the owner had laid a 200-metre-long cable from a transformer substation that supplies part of the village. The inspection resulted in an official report on unauthorised electricity use totalling 129,300 kilowatt-hours. The damage from this illegal connection exceeded ₽950,000 ($12,000).
A third mining farm, containing 23 devices, was found near the second one. Rosseti North Caucasus said that the total amount of damage from its operation has not yet been determined.
According to the company, all three farms were connected to the power grid without contracts and consumed electricity without authorisation.
Representatives of Rosseti said that official reports on unauthorised consumption had been filed, and that the materials had been forwarded to law enforcement agencies for further investigation. The company’s statement added that the energy provider continues its ‘systematic efforts to stop illegal electricity use and protect the region’s power grid infrastructure’.
In recent years, Daghestan has remained one of the Russian regions with a high number of illegal cryptocurrency mining farms. According to Rosseti, in 2024 alone, the damage caused by illegal mining connections across the North Caucasus exceeded ₽600 million ($7.5 million).
Previously, in July, energy specialists reported two similar cases in Daghestan’s Levashi district, where mining farms had been directly connected to power lines without contracts. The damage in those cases exceeded ₽850,000 ($11,000), with more than 136,000 kilowatt-hours of electricity stolen.
Later that same month, a mining farm consisting of nearly a hundred devices was discovered in the same village. The damage caused by its activities amounted to ₽1.7 million ($21,000), and the amount of stolen energy was nearly 300,000 kWh.
Illegal electricity consumption is classified under the Russian criminal code as ‘causing property damage by deception or abuse of trust’.
In December 2024, the Russian government decided to restrict cryptocurrency mining in several regions of the North Caucasian Federal District, including Daghestan, Chechnya, and Ingushetia. The ban came into effect on 1 January 2025 and will remain in force until 15 March 2031. According to the resolution, cryptocurrency mining in these regions was prohibited due to overloading of power grids and the risk of power outages.
Elizaveta Chukharova
