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Law enforcement closes down two illicit crypto farms in Dagestan

According to the Tass news agency, officers from the Ministry of Internal Affairs of Dagestan and the Federal Security Service have recently discovered a large crypto mining farm in Makhachkala, the capital and largest city of the Republic of Dagestan. According to Bitcoin.com News, a press release stated that the authorities are said to have confiscated over 1,476 crypto mining equipment. 

The department also reported that the owners of the illegal facility have provided services to other miners in the country, including the installation of mining rigs, connecting them to the facility grid and offering security services. Experts in the agency are now reportedly attempting to determine the overall market value of the seized mining rigs, along with the amount of electricity consumed. 

Law enforcement agents who raided the crypto farm stated that they are starting to collect evidence against the operators to prosecute them. If proven guilty, they would be charged under Part 2 of Art. 171 of the Criminal Code of the Russian Federation, ‘Illegal entrepreneurship,’ and Part 2 of Art. 165, ‘Causing property damage by deception or abuse of trust’.

In one similar incident, local power grid operator and distributor Rosseti Severniy Kavkaz also uncovered 95 devices that produce digital currencies at Мahachkala Vodokanal—the republic’s water supply utility. At the Vuzovskoe Ozero pumping station, the equipment was installed inside a metallic container.

The crypto mining facility held a power capacity of 260 kW and its electricity consumption had already skyrocketed to 4,500,000 million kWh, which is worth more than US$400,000. An announcement released by Russian power company Rosseti revealed that the farm was established by a Dagestan local who collaborated with some of the water utility’s employees.

In recent years, Dagestan has become a hotbed for illegal crypto mining due to its low electricity charges, along with Russian regions like Irkutsk Oblast and Krasnoyarsk Krai. As a result, these regions have been consistently suffering from blackouts, especially in areas where electrical facilities are not designed to handle extreme electrical consumption. 

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