Secret Bitcoin Mining Farm Found in a Moscow Prison

A psychiatric clinic in one of Russia’s oldest prisons has been secretly transformed into a cryptocurrency mining farm, law enforcement officials have discovered. The deputy director and unidentified associates are now under investigation for their alleged role in the construction of the farm.

The facility had been running inside the prison in central Moscow from November 2021 to February 2022, consuming electricity paid for by the government, authorities found.

The raid comes a week after officials from the Russian Federation and the Russian Republic of Dagestan uncovered a large cryptocurrency mining company in Makhachkala, the republic’s capital. Law enforcement officers seized 1,476 devices used to mint digital currencies, the Tass news agency reported.

The US Treasury Department’s Office of Foreign Assets Control sanctioned Russian Bitcoin miners in April after the country’s unprovoked invasion of Ukraine, which many experts predicted could hamper the multi-billion dollar cryptocurrency industry. of the country, since it occupies the third place in the largest mining in the world. hub.

Photo: AFP / Dimitar DILKOFF

The facility discovered in Moscow’s Butyrka Prison, built in 1771, housed cryptocurrency minting hardware that consumed around 8,400 kW of electricity, costing the government more than $1,000 (62,000 rubles), Kommersant reported.

The investigative team said the deputy director may have committed “actions that clearly go beyond his powers, significantly violating the legally protected interests of society or the state.” The Russians condemn illegal crypto miners due to recurring blackouts in their area.

Russia accounted for around 11% of the global processing power used to mint new cryptocurrencies, according to a Cambridge Center for Alternative Finance report in August 2021. The Russian Central Bank earlier this year pushed to ban cryptocurrency mining in the country. but the Russian president, Vladimir Putin, supported it and, instead of blocking it, wanted to regulate it.

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