While Russia is working on a bill to legalise crypto-currencies and mining activities, a Russian prison warden is allegedly guilty of establishing an illegal mining farm within the prison he runs.
Specifically, this illegal farm was built in a psychiatric clinic, a branch of the prison run by the Federal Penitentiary Service. This prison, also called Butyrka, is located in the Moscow region and was built in 1771, making it the oldest prison in Russia.
During an investigation, the Russian authorities discovered materials in the facility that could be used to mine crypto-currencies. However, this activity is completely illegal as reported by the Russian daily Kommersant. It was reportedly installed in November 2021 and used until at least February 2022.
The biggest problem with this illegal activity is the use of electricity subsidised by the Russian state to mine crypto-currencies (certainly Bitcoin). In fact, no less than 8,400 kW of government-paid electricity will have been consumed during the period of the mining farm’s operation. The total cost of the operation would amount to 62,000 roubles, or $1,000.
Currently being heard by the Russian authorities, the director of the prison is accused of “actions that clearly go beyond his powers, thus significantly violating the legally protected interests of the company or the state”. Moreover, according to Article 286 of the Russian Criminal Code, the penalty for this type of behaviour can be a fine of 80,000 roubles or 4 years in prison. It should be noted that his accomplices have not yet been found.
Russia wants to toughen sanctions against illegal crypto-currency miners
For some years now, Russia has been hunting illegal crypto-currency miners. As a result of this activity, Russian regions such as Krasnoyarsk Krai or Irkutsk Oblast, historically known for their low energy prices, have become prime destinations for crypto-currency miners.
The downside of these activities is the regular occurrence of power outages in residential areas due to mining. This is because the electrical facilities in these neighbourhoods are not designed to handle the high demand required for mining.
Furthermore, the discovery of this mining farm in this Russian prison is reminiscent of a recent case in Russia. In that story, an illegal crypto-currency mining farm had set up shop in a pumping station of Russia’s water supply service. As a result, the energy used was once again paid for by the Russian state.
In response to these activities, Russia wants to take a much tougher approach to crypto-currency mining by creating a legal framework to curb the creation of illegal farms.
As a result, investigations across the country have resulted in the seizure of nearly 1,500 pieces of mining equipment from two illegal farms. Recently, the Russian anti-monopoly agency even proposed the introduction of higher electricity rates for individuals wishing to mine crypto-currencies.
As a result, these various events should keep the Russian authorities’ desire to regulate crypto-currencies alive.
Currently being heard by the Russian authorities, the director of the prison is accused of “actions that clearly go beyond his powers, thus significantly violating the legally protected interests of the company or the state”. Moreover, according to Article 286 of the Russian Criminal Code, the penalty for this type of behaviour can be a fine of 80,000 roubles or 4 years in prison. It should be noted that his accomplices have not yet been found.
