A large Russian cryptocurrency mining farm has been shut down, with over 6,000 pieces of mining equipment being confiscated by Russian Authorities this week. Two of the factories former employees were arrested, both employees had been using the facility covertly for their operations. The illegal mining operation was uncovered due to an overdue payment for an electricity bill.
Major Mining Operation Thwarted
Police have since opened up criminal proceedings against the two former factory employees. According to the representative of the Russian Ministry of the Interior, Irina Volk, these charges include property damage and theft of electricity at present.
It’s estimated by Russia’s Ministry of Internal Affairs, that overall power consumption reached 8 Million kW/h, running up a total cost of $1,000,000. The power consumption led to a police investigation meanwhile the locals were apparently aware of this operation months before the police raid.
In March, local Russian news reported on cryptocurrency mining in Orenburg. But at the time, major authorities remained quiet on the subject until this month. Locals of Orenburg have reported the goings-on within the since abandoned rubber factory.
Russia’s Unusual History With Cryptocurrency Mining
This wasn’t the first time that covert mining has taken place in Russia. In September 2017, police raided a repurposed aircraft hangar and seized over 3,000 specialised GPU cards that allowed the perpetrators to mine over $1,650,000 in cryptos a month.
In February 2018, scientists within a nuclear research facility are facing arrest, due to their role in using the facility's powerful processors to mine cryptocurrency. This incident sparked major security concerns due to it taking place within a ‘Closed City’; a top secret area for the Russian Federation.
Russia’s Stance On Crypto
From late 2017, Russian authorities took an active approach against the use of cryptocurrencies within the federation. With major crypto exchanges being subjected to a wide-sweeping ban in October.
At the time, Reuters reported that the Russian government cited illegal activities as the reason for their stance against cryptocurrencies. In January 2018, there was a visible movement away from this hard-line approach, with the government’s desire to bring in regulations to support their use. This change in approach was due to the increasing popularity the likes of Ethereum and Bitcoin enjoyed amongst companies and individuals within the Federation.
In the same month, Russia also sought to develop a national cryptocurrency, called the ‘cryptoruble’. Both as a means of performing faster transactions between governmental bodies, but also in order to evade sanctions from the recent U.S. trade war threats.