Illegal mining hotel shut down in Russia

Key points:

• Krasnoyarsk prosecutors shut down large mining hotel.
• Its operation caused power outages in a nearby clinic.
• The tenant will be investigated for compliance with land and tax laws.

In Krasnoyarsk, a large mining hotel was shut down after the prosecutor’s office intervened. According to the agency, the entrepreneur set up a crypto farm on the territory of a former pulp and paper mill, exceeding the terms of the lease and arbitrarily installing additional containers with equipment.

What did the investigation reveal?

According to the inspection, in June 2024, the businessman received permission to connect only two workshops, but instead of “modest production,” he placed powerful mining rigs that overloaded the power grid. As a result, power outages occurred in a nearby clinic.

The tenant hid the electrical equipment from Rostekhnadzor (the Federal Service for the Supervision of Environment, Technology and Nuclear Management) specialists, who came twice for inspections. The prosecutor’s office stated:

“The most dangerous thing in this story is not the theft of electricity, but the network to which he connected. The same section of the power grid also supplies socially significant facilities, including the local clinic. The enormous load from the ‘mining hotel’ already led to power outages at the medical facility in January this year.”

Following demands from law enforcement agencies, the network operator restricted the power supply and the farm’s operations were suspended. The tenant will be subject to inspections in accordance with land and tax legislation, as well as fire safety regulations.

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In early 2025, the Russian Cabinet of Ministers banned mining and participation in mining pools in ten regions. From January 1, 2025, to March 15, 2031, mining is prohibited in Dagestan, Ingushetia, Kabardino-Balkaria, Karachay-Cherkessia, North Ossetia, Chechnya, the Donetsk and Luhansk People’s Republics, as well as the Zaporizhzhia and Kherson regions.