Energy workers discovered an illegal mining farm in Dagestan.

In the village of Shamilkala, a mining farm operating in defiance of the ban on cryptocurrency mining in Dagestan has been disconnected from the power grid.

As reported by the "Caucasian Knot," Dagestani energy officials reported in November 2025 that they had uncovered 73 instances of electricity theft by mining farm owners since the beginning of the year, causing a total damage of 85.7 million rubles.

In the village of Shamilkala in the Untsukulsky District, nine illegally installed mining devices connected to the power grid were found, the Dagestan Ministry of Energy reported on its Telegram channel on January 16.

The mining farm was discovered by Dagenergo employees during a joint raid with law enforcement. "The equipment was connected bypassing metering devices, using significant amounts of electricity. Reports of unauthorized electricity consumption have been drawn up based on the violation. An investigation is currently underway to identify those involved in the illegal activity. The materials have been forwarded to law enforcement agencies," the agency reported.

Illegal connections negatively impact the reliability of power grids, the agency noted. "It is also noted that cryptocurrency mining activities are prohibited in a number of regions of the Russian Federation, including the Republic of Dagestan, due to the high energy intensity of the processes and their negative impact on the stability of the energy system," the publication states.

As of 8:08 a.m. Moscow time on January 17, the Dagestan Ministry of Internal Affairs had not reported the raid in the Untsukulsky District on its website.

The mining ban is in effect in all republics of the North Caucasus Federal District.

20:38 25.12.2024

Economists assess the effectiveness of the mining ban in the North Caucasus

Mining in the North Caucasus republics, amid low electricity rates, is leading to high loads on the power grid. At the same time, to address the electricity shortage, it is first and foremost necessary to increase energy capacity.

As a reminder, in December 2024, the head of Dagestan Sergey Melikov signed an appeal to the Russian government requesting a ban on cryptocurrency mining in the republic, given the growing load on the power grid. According to a Cabinet of Ministers decree, a complete ban on mining has been imposed from 2025 until March 15, 2031, including in Dagestan, Ingushetia, Kabardino-Balkaria, Karachay-Cherkessia, North Ossetia, and Chechnya.

In July 2025, energy officials reported that raids in the homes of residents of the village of Levashi over two months found 11 mining farms, with damage estimated at at least 1.7 million rubles.

In April 2021, the Council of Ulama of Ingushetia banned Muslims from buying and selling cryptocurrencies due to the lack of legal guarantees for their owners. Blockchain technologies are permitted under Sharia law, but each cryptocurrency "must be approached individually" because there are varying opinions on them among Islamic authorities, Rashit Tugushev, a member of the Ulema Council at the Spiritual Administration of Muslims of Russia, told the "Caucasian Knot."

Power grids in Dagestan are not prepared for additional loads.

The fight against mining is being waged in Dagestan amid regular power supply problems. For example, in July 2025, residents of Makhachkala complained to the "Caucasian Knot" about regular power outages. According to them, power outages sometimes last from several hours to several days.

A Dagenergo employee reported that sometimes tens of thousands of people in the city are without power at the same time. "There aren't enough people to quickly fix the problems, so crews are sent from one location to another. The dilapidated networks can't handle the load," he explained.

In the summer of 2025, Sergei Melikov admitted that the republic's power supply system was "operating at its limit" and that the networks were "not ready for such loads." At the same time, the official noted the government's inefficiency and sluggishness.

"I have repeatedly raised the issue of our energy complex at the federal level, including proposing to begin implementing a comprehensive program for developing the region's energy system. All these decisions are being made, but not as quickly as we would all like. And although it's difficult to see the results of the enormous work being done, they are there," he said.