Russian energy giant Rosseti faces $14.2 million loss from illegal crypto mining

Russian energy provider Rosseti reportedly saw a significant financial hit due to illegal crypto mining in 2024, with losses amounting to approximately 1.3 billion rubles ($14.2 million).

On Feb. 18, local media outlet Tass reported that Rosseti said these losses stem from unauthorized electricity consumption across multiple regions, with the North Caucasus Grid alone accounting for 600 million rubles ($6.6 million).

Additional losses were recorded in Novosibirsk, the Center, and the Volga regions, totaling 520 million rubles ($5.7 million).

Authorities discovered one of the largest illegal mining operations in Novosibirsk, where 3,200 mining devices were confiscated. This single operation resulted in a financial loss of 197 million rubles ($2.2 million).

In total, Rosseti reportedly uncovered 130 cases of unauthorized grid connections linked to crypto mining. These incidents have been handed over to law enforcement, leading to over 40 criminal cases. Those involved could face legal consequences under Russia’s criminal code.

Meanwhile, the company has warned about the dangers of illegal mining, stating that unauthorized electricity use can overload the grid, lower voltage levels, and damage electrical equipment. These disruptions affect both the company’s infrastructure and regular users.

The energy firm recently revealed that it was exploring legal Bitcoin mining projects to optimize energy use—the firm plans to establish mining operations in areas with excess electricity to improve efficiency and boost revenue.

Using surplus energy, Rosseti aims to strengthen its financial position while addressing the challenges of unauthorized mining.

Russia’s Bitcoin mining ecosystem

The crackdown on unauthorized mining in certain areas comes amid rising demand for crypto-mining equipment in Russia.

In 2024, demand for industrial mining equipment reportedly tripled compared to the previous year. The increase can be linked with Russia’s recently introduced regulatory framework, which provided more clarity for the mining industry and allowed digital assets to be viewed as taxable property.

However, authorities are tightening their grip on unauthorized operations. Efforts are underway to track illegal miners more effectively, with regulators pushing for a nationwide registry of mining equipment.