Police Shut Down Illegal Crypto Farm in Dagestan

Law enforcement authorities in Russia’s Republic of Dagestan have shut down an illegal cryptocurrency mining operation in the village of Maidanskoye, located in the Untsukulsky district. According to police reports, a 52-year-old local resident organized the underground crypto farm by installing 68 mining devices inside a warehouse facility. The equipment was connected directly to power lines, bypassing electricity meters and violating energy regulations.

Regional energy providers estimated the damage caused by the unauthorized power consumption at more than 1.2 million rubles. Police seized all mining equipment, and investigators are currently considering criminal charges related to electricity theft and illegal mining activities. Officials emphasized that such operations pose serious risks to grid stability and public energy supply.

Dagestan leads the region in illegal mining cases

The Untsukulsky district has repeatedly been identified as a hotspot for underground crypto mining. Over the past two years, law enforcement officers discovered several large-scale farms in the area, including facilities with 105, 95 and 139 mining devices in different villages. In November alone, coordinated raids across Maidanskoye, Balakhani, Gimry and Untsukul resulted in the seizure of 160 mining units from 30 individuals, with total damages exceeding 6.5 million rubles.

According to the Russian Interior Ministry, authorities recorded 73 cases of electricity theft linked to illegal mining in Dagestan since the beginning of 2025. The total volume of stolen electricity reached 12.6 million kilowatt-hours, while cumulative financial losses amounted to approximately 85.7 million rubles. These figures underline the scale of the problem and its persistent nature.

Mining ban and regional energy risks

Data from MTS Digital Ecosystem shows that Dagestan accounts for 47% of all detected illegal mining farms in the North Caucasus Federal District. By comparison, Stavropol Krai represents 28%, North Ossetia 10%, and Karachay-Cherkessia about 2.5%.

Since January 1, 2025, Russian authorities have enforced a complete ban on cryptocurrency mining across Dagestan and the entire federal district. The measure aims to protect regional power grids, reduce equipment wear, and prevent large-scale electricity theft. Despite the ban, recent enforcement actions suggest that underground mining continues to challenge regulators and energy companies, making Dagestan one of the most closely monitored regions in Russia’s anti-mining campaign.

Read also: Illegal Bitcoin Mining Costs Russia $20B Annually