Siberian Lawmaker Found Operating Illegal Crypto Mining Operation in His Garage

The lawmaker, whose identity has not been disclosed, serves on the Krivodanovsky Rural Council in the Novosibirsk Oblast. Authorities have charged him under Article 165 of the Russian Criminal Code, which pertains to causing property damage by deception on a large scale.

According to the Novosibirsk Oblast Prosecution Service, the accused mined cryptocurrency using an unlawful link to the local electrical grid between June 2022 and June 2023. Investigators discovered that the official bought mining equipment online and installed it in his garage in the village of Krivodanovka. He reportedly connected his mining rigs to an electrical substation using makeshift methods, including piercing clamps and overhead power lines.

Prosecutors stated that the illegal operation resulted in the theft of electricity worth approximately $61,350. In addition to the financial losses, the operation allegedly placed undue strain on the local power grid. Law enforcement officers have confiscated 16 mining rigs valued at over $11,300 from the site.

The case has been filed with the Novosibirsk District Court. If convicted, the lawmaker faces up to five years in prison under the Russian Criminal Code. The prosecution emphasized that unauthorized connections to power lines not only result in financial losses but also pose significant safety risks to the community.

This case is part of a broader effort by Novosibirsk authorities to address illegal cryptocurrency mining, which has been on the rise in the region. In October, law enforcement officials raided a property in the Moshkovsky District, uncovering six administrative violations related to another illegal mining operation. The owner of the property allegedly earned over 12 million rubles (approximately $123,000) from mining activities.

While officials have not specified the cryptocurrency being mined in the current case, local forums and discussions suggest that many home miners in Siberia concentrate on Ethereum (ETH). The region’s cold climate and relatively low electricity costs make it an attractive location for such operations, despite their illegal nature.

A crypto mining home setup in Siberia. Source: BBC via Youtube

Illegal crypto mining has become a significant concern in Russia, particularly in energy-intensive regions like Siberia. By bypassing legal channels and exploiting the power grid, such operations contribute to widespread economic and infrastructural challenges.

“Hydropower-rich regions like Novosibirsk are particularly vulnerable to these activities,” explained Niko Vorobyov, author of a book on the global drug trade. “The combination of low temperatures and abundant electricity creates a perfect storm for unauthorized mining setups.”

The growing prevalence of illegal crypto mining highlights the need for stricter regulatory measures and improved monitoring of power usage in Russia. While Novosibirsk Oblast’s efforts signal a commitment to tackling these issues, the rise of decentralized mining operations continues to pose a challenge. With new cases emerging regularly, the crackdown on illegal mining remains an ongoing battle for Russian authorities.