Illegal crypto mining farm on state land shut down in Russia

Russian prosecutors have dismantled a massive illegal crypto mining farm operating on state-owned land without permits, disguised as an industrial plant.

In Nazarovo, an industrial town in Krasnoyarsk Krai, Russia, prosecutors have shut down an illegal open-air crypto mining operation that reportedly earned its operators around 4.6 million rubles ($58,672) per month.

As stated in a Telegram post by the official Krasnoyarsk Krai Prosecutor’s Office account, the 30,000-square-meter site was officially registered as hosting a non-residential building under a management company.

In reality, no such building existed.

Instead, the area was filled with mining equipment, power units, and other infrastructure, all leased to a third party under the guise of renting out the fictitious structure. According to the prosecutors, the land itself is state-owned, and the company had no legal right to use it.

Additionally, the mining equipment was connected directly to the city’s power grid, raising concerns about potential power outages and safety hazards. The operation also violated fire safety regulations.

After the prosecutor’s office issued a warning that went ignored, the matter was taken to court. A judge ordered the immediate suspension of the facility’s operations until all legal violations are resolved. Enforcement of the court ruling is being monitored by the prosecutor’s office.

Last year, Russia officially legalized crypto mining and implemented a taxation system that could generate as much as 200 billion rubles ($2 billion) annually from the sector. However, since then, the authorities have imposed mining restrictions in certain Siberian areas to mitigate the risk of power shortages.

Even though crypto mining is legal throughout Russia — except in those restricted regions — many miners bypass official channels to avoid high electricity costs and taxes. This often involves illegally connecting to the power grid, using residential tariffs meant for households, or operating without registering their facilities — actions that can strain local infrastructure and pose serious fire and safety risks.

For example, earlier this year, a staff member at a regional energy provider in Krasnoyarsk Krai was caught accepting bribes to overlook illegal crypto mining connections. Investigators found that the miners involved had stolen electricity worth over 9 million rubles ($119,000) by bypassing the official power grid.

In a more resourceful vein, hackers have been exploiting vulnerabilities in Russian smart home devices, turning them into crypto mining botnets and tools for cyberattacks.