Russian Electricity Distributor seeking $800,000 from people mining crypto

Amidst the tussle between the Russian government and crypto, a local electricity distributor has caused some more trouble, especially to residents mining crypto. The distributor is seeking $800,000 from residents for mining crypto with subsidized electricity.

Irkutskenergosbyt is the name of the electricity distributor in Irkutsk Oblast. The distributor has filed 137 lawsuits against residents for consuming subsidized electricity for mining crypto. With all these lawsuits, the distributor aims to recover 63 million Russian rubles in compensation.

The utility has claimed that the home miners engaged in entrepreneurial activities while paying for electricity and customer-rated tariff. To keep things in perspective, commercial rates of electricity are four times more than the customer rates. Moreover, with the rise in electricity consumption, breakdowns and outages became commonplace.

According to the stats, there were over 1,200 cases of ‘gray’ or illegal mining in 2021 alone. Also, with the 137 lawsuits filed, they’ve recovered compensation from 19 claims of about 21 million rubles.

It’s a common fact that crypto mining significantly increases the load on the consumed electricity in the region. In 2020, Irkutskenergosbyt’s customers consumed about 7 billion kilowatt-hours (kWh) of electricity. However, the figure in 2021 increased to 8 billion kWh. What’s surprising is that the number of private households and apartments did not grow at that time while the consumption increased substantially.

Most of the mining farms are located in Irkutsky and Shelekhovsky districts. Since these are rural areas, the cost of electricity is significantly lower at 0.86 rubles ($0.01) per kWh. On the other hand, businesses have to pay 3.6 rubles ($0.046) per kWh.

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