At Least 1,000 Lawsuits Filed Against Crypto Miners in Russia’s Irkutsk Region

Authorities in Russia’s Irkutsk region have so far filed 1,000 lawsuits against so-called “gray” miners, or people who mint coins in their homes. In more than half of these cases, the courts ordered defendants to pay damages to distribution network operators.

Hundreds of crypto miners were sued in Irkutsk for mining digital currencies using subsidized electricity

Distributors of electricity in Siberia Irkutsk region filed suit #1000 against consumers illegally mining cryptocurrencies in residential areas. For 600 of them, the judges ruled that the so-called “gray” miners must pay a total of more than 260 million rubles ($3.5 million) in damages and damages.

According to the regional news portal Irk.ru, the most common reason for going to court is an unusually high consumption of electricity. Such is the recent case of the owner of a house in the village of Novaya Razvodnaya, whose average monthly electricity consumption in one year reached almost 80,000 kWh, exceeding the total amount burned by other 15 houses on the same street.

The man denied any wrongdoing, claiming that he did not mine cryptocurrencies but used heat guns to dry out his basement. The Irkutsk regional court did not accept his explanation, and as a result, he will have to pay the local energy company Irkutskenergosbyt more than 2 million rubles (about $27,000).

This amount should make up the difference between subsidized household electricity rates, which can be as low as $0.01 per kWh in rural areas, and the much higher rates that businesses must pay.

In the past couple of years, authorities have been trying to crack down on home-based cryptocurrency mining in the region, which has become a popular source of additional income for a growing number of people. Officials believe that regulation of mining in Russia and the introduction of differentiated tariffs depending on consumption will help solve the problem.

Citing Deputy Energy Ministry Pavel Snikkars, in December the Russian press reported that electricity distribution companies began to identify home-made mining farms in residential buildings due to increased network loads at substations and are now pursuing illegal miners.

Despite the fact that cryptocurrency mining in Russia is not yet regulated, a special bill is under consideration in Parliament, at present such activity is not expressly prohibited. However, utilities can still prove in court that these customers are not using electricity for domestic purposes and demand that they be charged at commercial rates.

Do you think the Russian authorities will continue to persecute amateur crypto miners? Share your thoughts on this subject in the comments section below.