In Russia, some crypto miners go underground - literally

MOSCOW (Reuters) - Russia's southern republic of Dagestan has called for tougher measures against power-hungry cryptocurrency miners who local officials said were causing electricity outages and seeking to evade the law by building mining installations underground.

Miners of digital coins have come under scrutiny across the world in recent years because the computing power needed to solve the complex puzzles involves specialised hardware which operates around the clock and guzzles electricity.

Dagestan's local prime minister, Abdulmuslim Abdulmuslimov, said that the authorities needed to pay more attention to illegal crypto mining after a substation fire in the capital was caused by a spike in consumption due to crypto miners.

"The owners of illegal cryptocurrency mining installations are coming up with new methods of 'circumventing' the law - they install mining farms underground," Abdulmuslimov said.

Dagestan's government released footage showing investigators inspecting a crypto mining installation in a makeshift underground cavern with dozens of fans to cool the computers.

Cryptocurrency mining legislation, signed by President Vladimir Putin, will come into effect under certain conditions from Nov. 1, 2024.

A special register will be maintained by the finance ministry for companies engaging in cryptocurrency mining. Individuals mining digital currencies will have to provide certain information to Russia's financial monitoring regulator.

(Reporting by Guy Faulconbridge and Alex Marrow; Editing by Sharon Singleton)

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