Russian authorities have arrested a fugitive cryptocurrency miner who ran a mobile farm in the Caucasus region and had evaded arrest for months.
Officials from Dagestan’s power company said the coin-minting vehicle was eventually discovered using a quadrocopter equipped with a thermal camera.
Dagestan deploys drones in war against unmanned miners
Russia is now using cutting-edge technology, similar to those seen on the battlefields of Ukraine, to identify temporary mining facilities in areas that are illegally connected to the power grid, causing energy shortages, breakdowns, and economic losses.
A new approach to crack down on illegal cryptocurrency mining has been introduced in one of the North Caucasus republics, where minting digital currencies in defiance of the law has become almost a national sport.
Magomedshapi Shapyev, acting director of Dagenergo, the local branch of the Rosseti power grid operator, announced that it took three months for employees of the Dagestan energy distribution company to track down the improvised cryptocurrency farm on wheels.
The mining hardware was installed in the cargo hold of a gazelle van owned by residents of Tashkapur village, Levasinsky district. According to official information cited by RBC Crypto and Life.ru, the men installed 72 pieces of mining equipment in the back of a modified vehicle.
Shapiev also said that this is not the first time authorities have dealt with the same individual, who had a similar facility seized just over a year ago. He elaborated:
“It is noteworthy that this mining farm was discovered by the same consumers whose equipment was seized during a regulatory operation last year when a similar mining farm was liquidated.”
Preliminary estimates suggest that the economic damage resulting from the clandestine mining operation amounts to approximately 1.5 million Russian rubles (about $18,500).
The power company admitted that the van was running on electricity supplied by the electricity meter, which showed a consumption of more than 152,000 kWh. But after careful inspection, electrical engineers suspect it may have been tampered with to give false readings.
The interesting part of this story is that the mining farm was discovered using a drone with night vision. Novye Izvestia newspaper posted the video.
Mr. Shapiev’s staff began using the equipment this summer. UAV (unmanned aerial vehicle) cameras can be used to detect operating, heat-producing mining devices in attics, basements, and other locations where miners hide their cryptocurrency extraction machinery.
All evidence collected from the mining gazelle was examined by technicians and handed over to law enforcement officers for forensic analysis.
Russia takes serious steps to abolish illegal cryptocurrency mining
Magomedshapi-Shapyev clearly emphasized that crime is exacerbated by the fact that mining has been officially banned in Dagestan since the beginning of this year.
The republic is one of about a dozen regions in Russia that have partially or completely banned mining, after becoming the country’s first relatively well-regulated cryptocurrency activity.
Russia will legalize mining in 2024, requiring miners that consume more than 6,000 kilowatt hours of electricity each month to register with the state and pay taxes.
However, low and often subsidized electricity prices in some parts of the country have attracted significant numbers of miners, both legal, amateur, and illegal, creating headaches for local governments and other consumers in terms of power shortages.
Officials in these regions, from Siberia to the Caucasus, initially introduced seasonal and later permanent mining restrictions with the approval of the federal government in Moscow. As Cryptopolitan recently reported, two more regions may soon be added to the list.
According to one estimate, less than a third of mining operations have so far been registered with the Federal Tax Service (FNS), costing the Russian state more than $120 million a year in budget revenue from the industry. Unauthorized miners are threatened with fines and seizure of illegally minted cryptocurrencies.
The seizure of the mobile farm in Dagestan comes after authorities in Irkutsk, Russia’s mining capital, dismantled in mid-October one of the largest unlicensed mining facilities discovered in recent months.
