Russian Authorities Shut Down $700K-a-Year Illegal Crypto Mining Farm Disguised as Industrial Facility

Russian authorities have dismantled a large-scale illegal crypto mining operation in Nazarovo, Krasnoyarsk Krai, revealing a scheme reportedly generating over 4.6 million rubles ($58,000) per month.

According to a Telegram statement from the Krasnoyarsk Krai Prosecutor’s Office, the mining farm operated openly on a 30,000-square-meter plot of state-owned land, falsely registered as containing a non-residential building that did not actually exist.

The site, secured with barbed wire, was densely packed with mining rigs and extensive power infrastructure.

Prosecutors revealed that all equipment had been leased under the pretense of renting space in the nonexistent facility.

The company lacked legal rights to the land and failed to obtain necessary permits.

Compounding the violations, the operation was illegally connected directly to the town’s power grid, bypassing authorisation and risking outages and safety hazards.

Local energy officials warned that this unauthorised electricity use heightened the risk of emergency blackouts.

Additionally, authorities cited serious fire safety breaches and noncompliance with public safety regulations.

Despite multiple warnings, the company persisted until a court ordered an immediate suspension of operations.

The prosecutor’s office is actively monitoring enforcement.

This crackdown highlights ongoing challenges posed by illegal crypto mining in Russia, even as the country has moved to legalise and regulate the sector.

In 2023, Russia introduced a taxation framework expected to generate billions of rubles annually from legal mining activities.

However, due to power limitations, mining remains restricted in certain Siberian areas, including parts of Krasnoyarsk.

While legal across much of Russia, many miners avoid registration and high electricity costs by tapping into the grid illegally or exploiting residential electricity rates.

These practices strain infrastructure and pose risks to local communities.

Earlier this year, an energy company employee in Krasnoyarsk was arrested for accepting bribes to overlook similar unauthorised mining connections, where electricity theft reportedly amounted to over 9 million rubles ($119,000).

Russia Intensifies Efforts to Combat Rising Crypto Mining Thefts and Malware Attacks

In Russia’s Republic of Buryatia, authorities uncovered yet another illicit crypto mining operation—this time hidden inside a KamAZ truck.

During a routine inspection on 14 June, inspectors discovered 95 mining rigs powered by a 10-kilovolt line intended to supply electricity to a nearby village.

Two individuals fled the scene in an SUV before law enforcement could intervene.

According to Buryatenergo, a regional division of Rosseti Siberia, this marks the sixth case of electricity theft linked to crypto mining in the region since January.

Officials warn that such unauthorised operations place immense strain on local power grids and pose a serious risk of blackouts.

To mitigate these risks, Buryatia bans crypto mining from 15 November to 15 March each year—its peak winter season—except for officially registered operators in designated districts.

The enforcement effort is part of a broader federal crackdown on mining during energy-intensive periods.

In late 2024, the Russian government extended mining restrictions to several regions, including Dagestan, Chechnya, and parts of eastern Ukraine under Russian control.

Since April, Irkutsk—one of Russia’s largest crypto mining hubs—has faced a complete ban on mining activity.

The restrictions have significantly impacted firms like BitRiver, which runs some of the country’s largest data centers in Irkutsk.

The region has long attracted miners due to its low electricity costs, but mounting power constraints have turned it into a flashpoint in Russia’s evolving crypto policy.

Adding to the country’s crypto-related challenges, cybersecurity firm Kaspersky has reported an alarming uptick in cyberattacks linked to crypto mining.

A sophisticated hacking group known as Librarian Ghouls—also referred to as Rare Werewolf or Rezet—has been hijacking business computers across Russia and the broader CIS region.

The campaign, active through May 2025, targets industrial companies and engineering schools, installing unauthorised Monero mining software while simultaneously stealing sensitive data, including crypto wallet credentials and private keys.