Illegal Mining Farm Found Under Apartment Block in Dagestan

Authorities uncovered an illegal crypto mining farm in Dagestan. The operation consumed power equal to a residential building. Police opened a criminal case.

Secret bitcoin mining caused power outages

In Makhachkala, the capital of Dagestan, energy specialists discovered an underground crypto mining farm hidden in the basement of a residential building. The illegal setup contained 135 mining devices connected directly to the power grid.

According to the utility company Dagenergo, the farm consumed as much electricity as a private house. This caused frequent power outages in the apartment block and neighboring buildings for several months.

Police are now searching for the farm’s owner. He faces criminal charges for large-scale electricity theft. All the seized mining equipment has been confiscated.

Russia tightens control over crypto mining

Since January 2025, crypto mining has been banned in Dagestan and several other Russian regions. However, mining is still legal in most parts of the country under strict state supervision.

Currently, mining rights are granted to:

• registered legal entities and entrepreneurs listed in the Federal Tax Service (FTS) registry;
• individuals, provided their consumption does not exceed 6000 kWh per month.

Since July 30, data centers must report miners’ activities to tax authorities. The government aims to regulate the industry and prevent illegal mining operations.