A local elected official in Siberia’s Novosibirsk region is facing prosecution for diverting more than $61,000 worth of electricity to power an underground mining center. This case comes against a backdrop of tightening crypto regulations in Russia.
Table of Contents
Siberian politician diverts $61,000 in electricity to mine Bitcoin
According to a Telegram message from prosecution service of the Novosibirsk oblast, an unnamed member of the Krivodanovsky rural council has been arrested for illegal crypto mining. The lawmaker is accused of causing “material damage by deception on a particularly large scale” under Article 165 of the Russian Criminal Code. Between June 2022 and June 2023, the elected official allegedly operated a mining facility in his garage in the village of Krivodanovka, without the authorization of the public electricity supplier JSC RES.
Investigators discovered that the suspect had purchased various mining equipment online, which he had then installed in his garage. The system was powered by a fraudulent electrical connection: the lawmaker had used perforating pliers to connect his 16 mining platforms, valued at $11,300 directly to an electrical substation via an overhead line on a nearby power pole. This installation enabled him to bypass all electricity billing, resulting in an estimated loss of over $61,000 to the local power grid.
If found guilty, he could face up to five years’ imprisonment under the Russian Criminal Code.
Repression accumulates in a renewed legislative framework
This arrest comes as Russia strengthens its legal arsenal regarding cryptos. On November 27, the Federation Council has passed new legislation establishing a clear tax framework for crypto activities.
Miners are now required to report their operations to the tax authorities or face fines, while transactions are subject to a 13% to 15% income tax.
Local law enforcement is only the tip of the iceberg in Siberia. Law enforcement agencies are stepping up operations against clandestine facilities, as demonstrated by the recent discovery of an illegal farm with profits of over $123,000.
As a journalist at Coinpri, I’ve been captivated by the world of bitcoin and blockchain since 2020. The decentralized aspect of Bitcoin particularly piqued my interest. Since then, I’ve been working constantly to spread my knowledge, hoping one day to see a world where everyone fully enjoys their financial freedom.
