Russia Loses Billions to Illegal Crypto Mining

Russia’s budget may be losing over 10 billion rubles annually due to illegal cryptocurrency mining. Experts say miners disguise their operations as industrial facilities, causing strain on the power grid and avoiding taxes.

Illegal crypto mining costs Russia billions in lost taxes

Russia is losing at least 10 billion rubles in tax revenue every year due to illegal crypto mining operations, according to Petr Fedorov, an associate professor at the National Research University MIET.

Fedorov explained that unregistered miners often hide their farms behind industrial façades to avoid detection and electricity costs.

“They use abandoned farms or rural facilities with existing power connections to disguise energy usage,” he said.

Mining farms hidden in Dagestan and Irkutsk

Most illegal mining activity, Fedorov noted, occurs in Dagestan and the Irkutsk region, where electricity remains cheap and enforcement is limited. These shadow operations frequently cause network overloads and power failures, increasing strain on regional grids.

Authorities can identify such farms by tracking abnormal power consumption or frequent equipment malfunctions in local networks, Fedorov added.

Authorities urged to regulate and enforce

Experts emphasize that unregistered mining not only deprives the budget of revenue but also threatens energy security and fair electricity distribution.

Fedorov believes that the introduction of a national mining registry and stricter energy monitoring could reduce illegal activity and promote transparency.
He also noted that regulated cryptocurrency mining could contribute to Russia’s economy if miners operated legally and paid taxes like other businesses.