Russia’s southern republic of Dagestan is taking a stand against power-hungry cryptocurrency miners who are causing electricity outages and trying to evade the law by constructing underground mining facilities. The local prime minister, Abdulmuslim Abdulmuslimov, has called for stricter measures to address illegal crypto mining activities after a substation fire in the capital was linked to a surge in consumption due to mining operations.
Miners of digital currencies have faced scrutiny worldwide due to the high energy consumption of their operations, which require specialized hardware and run continuously. In response to these issues, Dagestan’s government has released footage of investigators examining a crypto mining setup in an underground cavern equipped with numerous fans to cool the computers.
President Vladimir Putin has signed cryptocurrency mining legislation that will take effect under certain conditions starting from November 1, 2024. The new law will establish a special register maintained by the finance ministry for companies involved in cryptocurrency mining, while individuals engaging in mining activities will be required to provide specific information to Russia’s financial monitoring regulator.
Analysis:
The crackdown on cryptocurrency miners in Dagestan highlights the growing concerns over the environmental and regulatory impacts of crypto mining activities. By implementing stricter measures and regulations, the government aims to address the issues of electricity outages and illegal mining operations, ultimately shaping the future of the crypto mining industry in the region. Individuals and companies involved in cryptocurrency mining should be aware of the changing landscape and comply with the new legislation to avoid penalties and ensure sustainable operations.