The Russian area is struggling to meet the energy needs associated with Bitcoin mining

In Irkutsk Oblast, a local energy distributor is attempting to reclaim almost $800,000 from illegal bitcoin miners.

As cryptocurrency mining becomes more prevalent in Russia, one local area struggles to preserve electricity stability in the face of enormous inflows of new cryptocurrency mining businesses.

According to local news agency TASS, Russia’s Irkutsk Oblast, a federal district and the main hub for trade routes from China, saw a fourfold spike in energy usage in 2021 owing to mining activity.

Yevgeny Vechkanov, head of technology and development at Irkutsk Electric Networks, attributed the significant rise of crypto mining operations to both the anticipated huge crypto rally in 2021 and China’s September cryptocurrency ban. “These variables aggravated the situation, resulting in a quadrupling of energy use by 2020,” he stated.

Vechkanov stated that residents have been systematically building crypto mining farms at their homes and dachas, resulting in increasing energy usage and frequent power grid failures.

Oleg Prichko, director of Baikal Energy Company, attributed the increase in electricity use to the growing popularity of local mining activities. He said that during the first two weeks of January, up to seven Boeing 737 planes “completely filled with Chinese mining gear” landed in Irkutsk.

Andrey Zhbanov, head of the Criminal Investigation Department of the Ministry of Internal Affairs’ Main Directorate, said that some Irkutsk locals have even established mining farms in dog homes. “You may laugh all you want, but it’s a comfortable temperature for the dogs. Mining generates a great deal of heat, which has a dual advantage,” he remarked.

The new data comes months after Irkutsk officials initially reported a substantial rise in energy use in October 2021, attributing it to the enormous expansion of mining activities caused by the departure of Chinese miners. The Russian Energy Ministry earlier said that it was developing a new framework in late 2021 to separate prices for regular consumption and crypto mining.

Irkutskenergosbyt, a major local power distributor, has filed 137 cases against customers who allegedly used discounted energy to manufacture digital currency in underground and garage mining operations. According to reports, the corporation aims to collect 63 million Russian rubles ($820,000) in damages.

The announcement comes soon after Russian President Vladimir Putin said that the country’s abundance of power gives it a “competitive edge” in cryptocurrency mining. In November 2021, the Russian State Duma established a working committee to develop rules tailored to the crypto mining industry.

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