Growing Concerns in Dagestan
In Russia’s southern republic of Dagestan, officials are calling for stricter measures against cryptocurrency miners. Local authorities have reported that these miners are causing electricity outages and attempting to evade the law by setting up mining operations underground.
The Impact of Cryptocurrency Mining
Cryptocurrency mining has faced increasing scrutiny worldwide due to its significant energy consumption. The process requires specialized hardware that runs continuously, consuming large amounts of electricity to solve complex puzzles.
Local Authorities Respond
Abdulmuslim Abdulmuslimov, Dagestan’s local prime minister, emphasized the need to focus on illegal mining activities. He pointed out that a recent fire at a substation in the capital was caused by a surge in electricity consumption linked to cryptocurrency miners.
“The owners of illegal cryptocurrency mining installations are developing new methods to circumvent the law,” Abdulmuslimov stated. “They are installing mining farms underground.”
Investigations Underway
In response, Dagestan’s government released footage of investigators examining an underground crypto mining site. The makeshift installation was equipped with dozens of fans to cool the mining computers.
Upcoming Legislation
New cryptocurrency mining legislation, signed by President Vladimir Putin, is set to take effect on November 1, 2024, under specific conditions. This law will require a special register maintained by the finance ministry for companies engaged in cryptocurrency mining. Additionally, individuals involved in mining digital currencies will need to provide information to Russia’s financial monitoring regulator.
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