Illegal Bitcoin Mining in Ingushetia
In the first six months of 2025, a concerning trend emerged in Ingushetia, a hotspot for Bitcoin mining in Russia, where illegal miners reportedly siphoned off electricity worth approximately $4.3 million. This figure was highlighted in a report by Rosseti, the state-operated power organization, which indicated that illegal mining activities were responsible for over 94% of the total power theft in the region.
Electricity Theft and Financial Loss
According to Rosseti North Caucasus, the total amount of unrecorded electricity consumption in Ingushetia stood at 37.5 million kWh during this period, translating to a financial loss of more than $4.4 million for the power company. Of this loss, a staggering 35.4 million kWh was attributed directly to unauthorized cryptocurrency miners, primarily centered around four major illicit mining operations.
Rosseti announced the successful dismantling of these operations and claimed to have confiscated 450 mining rigs in the process.
Efforts to Combat Electricity Theft
The Ingushenergo power company reported identifying 177 instances of electricity theft as its specialists worked to address the rampant illegal usage. As part of their enforcement efforts, power providers have started deploying drones equipped with thermal imaging technology to locate these unlawful mining sites.
Broader Implications and Regional Context
While the energy crisis caused by illegal mining has intensified—leading to warnings about increased risks of accidents and outages—crypto mining remains a controversial yet popular endeavor in the area. Similar issues are reported in the neighboring North Caucasus republics, where mining activities are banned during the winter months until March 15, 2031.
The situation reflects broader challenges, with observers noting that entire villages in nearby Abkhazia have become characterized by the noise of mining machines. In Dagestan, power companies are incentivizing employees with bonuses to help uncover hidden mining farms.
Legal Framework and Future Challenges
The legal framework around cryptocurrency mining in Russia stipulates that miners can operate without notifying tax authorities if they consume less than 6,000 kWh of electricity a month. However, new legislative proposals threaten severe penalties for industrial miners who bypass the registration process with the Federal Tax Service. Industry leaders estimate that approximately 90% of mining operations in Russia focus specifically on Bitcoin.
