AI-driven oversight reshapes Russian crypto mining as farms surge 44% across regions

Russia’s fast-growing digital asset sector is undergoing a structural shift, with Russian crypto mining expanding sharply under new rules and AI-based oversight.

Russian crypto mining farms surge despite regional bans

The number of active cryptocurrency farms in Russia has increased by 44% in 2025, even as authorities expand regional restrictions on the activity.

Moreover, this jump follows Moscow’s decision to legalize the crypto business in 2024, which unlocked new capital flows into mining infrastructure.

Farms minting digital currencies like Bitcoin now total 196,900, according to a report compiled by a government-linked monitoring system. For comparison, they numbered 136,600 at the end of 2024, when the annual increase was just 7% year-on-year.

The rapid expansion comes despite a mining ban now covering more than a dozen Russian regions. However, many of those areas have imposed restrictions due to energy shortages that local authorities blame on the mining boom and rising power demand.

AI tools track energy use to uncover hidden farms

Russia counts its crypto farms using AI-based systems that monitor energy consumption patterns. The EnergyTool platform, developed by telecom group MTS, identifies mining installations by analyzing electricity usage data in real time.

The system ingests information from automated metering infrastructure and uses artificial intelligence to flag anomalies, such as unusual base loads, suspected tampering with meters or unauthorized connections to the grid. That said, the platform is designed to detect facilities even when they are not officially reported to state agencies.

The solution relies on machine learning algorithms and has been in operation for several years. In January, MTS announced it had obtained a patent for the technology, underscoring the growing role of energy consumption tracking in Russia’s oversight of the mining industry.

According to the latest data from the tool, cited by business outlets RBC and Kommersant, crypto farms have been mushrooming across Russia in 2025. Moreover, industry sources say both regulated investment and illegal activity are driving the trend.

Irkutsk retains mining hub status amid tightening rules

The MTS analysis shows three regions leading by newly detected crypto farms: the Siberian oblasts of Irkutsk and Novosibirsk, and the Southern Republic of Bashkortostan (Bashkiria). Irkutsk, often described as the mining capital of Russia, has long attracted miners thanks to comparatively low electricity tariffs.

However, the concentration of legal and illegal operations in Irkutsk led to a permanent mining ban in the southern part of the region. More than 10 Russian regions have already prohibited mining activity until 2031, reflecting mounting concern over grid stability and power prices.

Meanwhile, the Republic of Khakassia has overtaken Irkutsk as the most profitable location for miners, followed by the Tyumen and Murmansk regions. That said, not all areas are seeing the same scale of growth, with some registering only modest expansion.

The smallest number of newly discovered mining facilities was recorded in Volgograd, Ivanovo and Sverdlovsk regions, the Chuvash Republic (Chuvashia), the Yamalo-Nenets Autonomous Okrug, the Altai Krai and territories forming the Central Black Earth Region. These disparities highlight how local electricity prices and infrastructure constraints shape mining geography.

Legalization, investment and the gray economy

The MTS study indicates that the legalization of mining, which became Russia’s first fully regulated crypto segment, is a key driver of expansion. Fresh investment is flowing into data centers and hardware, supporting broad-based mining investment growth across multiple regions.

Sergey Bezdelov, head of Russia’s Industrial Mining Association, argues that the spike is a direct consequence of recognizing mining as an investment asset class. “Since the state regulation of mining in August 2024, institutional investors have finally shifted toward the industry, which results in these figures,” he said.

Bezdelov also links part of the rise to operations emerging from the shadow economy, as some miners register and pay taxes. However, he concedes that it remains difficult to estimate the scale of unregistered activity that continues to operate off the books.

To operate legally in Russia, companies and individual entrepreneurs must register with the Federal Tax Service (FNS) and pay the relevant taxes. Yet, official estimates suggest that only about 30% of those who mine comply with these obligations, leaving a large share outside the formal system.

Proposals on the table include criminalizing unregistered mining and offering amnesty to enterprises currently in the gray zone if they come forward. Moreover, some policymakers see tougher measures as necessary to align tax receipts with the true scale of russian crypto mining activity.

Crackdown on illegal mining and strategic value

Russian authorities have stepped up enforcement against illegal crypto mining, using increasingly sophisticated tools in cooperation with telecom and power companies. They combine data from smart electricity meters with internet traffic analysis to identify suspicious loads linked to mining hubs.

At the same time, the economic importance of the mining sector for the sanctions-hit Russian economy has been formally recognized by both the Bank of Russia and the Kremlin. However, regulators still struggle to determine whether the legal or illegal segment contributes more to the industry’s rising macroeconomic weight.

Anton Gontarev, commercial director at Intelion Data Systems, a major industry player, agrees with Bezdelov that large-scale capital inflows into the now-regulated sector are underpinning growth. That said, not everyone shares this view on the drivers of expansion.

A representative of energy group EN+ attributes most of the increase in crypto farms to the rise of unlawful operations rather than formal investment. This divergence in assessments illustrates how difficult it is to quantify the relative impact of legal and underground mining on Russia’s power grid and tax base.

Outlook for Russia’s AI-monitored mining landscape

Russia’s mining map is being reshaped by a combination of cryptocurrency mining regulation, regional bans and AI-based monitoring tools such as the MTS EnergyTool platform. Moreover, the balance between formal investment and hidden activity will likely determine how sustainable the current growth trajectory proves to be.

For now, the country is relying on AI systems and tax incentives to channel mining into the legal sector while containing pressure on the power grid. Whether policymakers opt for harsher criminal penalties or broader amnesties, the contest between regulated and underground operations will remain central to Russia’s evolving crypto mining economy.