A Russian power company found a way to increase electricity prices for consumers who use household electricity to mine cryptocurrency. The regional distribution company has taken dozens of amateur miners to court and has won some cases.

Power companies pursue crypto miners to use subsidized power to mint digital coins

Irkutskenergosbyt, an electricity distributor in the Irkutsk region of Russia, has managed to increase the electricity bills of encrypted mines in private residences. The utility company was able to prove in court that their owner was carrying out business activities while purchasing electricity at a low price suitable for household consumers.

The company has filed 85 lawsuits against people involved in household crypto mining this year, claiming a total of 73.3 million rubles (more than US$980,000). According to a report by the Russian business daily Kommersant, it has won 9 cases and is expected to receive 18.7 million rubles ($250,000). The court ordered these miners to pay electricity charges at commercial electricity prices in the future.

Irkutsk Oblast is considered to be the crypto mining capital of Russia and attracts many mining businesses with its low electricity prices. The subsidy rate for people in rural areas is only 0.86 rubles (0.01 US dollars) per kilowatt hour (kWh), while small businesses need to pay about 3.6 rubles (about 0.05 US dollars) per kilowatt hour.

Only in 2021, Irkutsknegosbit More than 1,000 underground mining facilities have been identified. In one such case, a single mine installed in a private residence burns 193,000 kWh per month, which accounts for 22% of the total consumption in the village of Plishkino.

The utility company warned that an encrypted farm like this would threaten the stability of the power supply and could cause accidents. The company won a lawsuit filed against the owner by the Sverdlovsk District Court, and he must pay 7.5 million rubles (more than US$100,000) in damages.

Crypto miners can file a complaint with Russia’s Supreme Court

The report cited representatives of consumer and supplier organizations who questioned the effectiveness of Irkutskenergosbyt’s case-by-case approach and called for differentiated tariffs on cryptocurrency miners. The Russian Ministry of Energy insists that such a decision must become part of the country’s socio-economic policy and should be made at the government level.

According to a legal expert, miners sued by Irkutskenergosbyt can choose to submit their case to the Supreme Court. Pavel Ganin, a partner of a Russian law firm, believes that the judicial authorities can accept and consider such complaints, but it is unlikely to overturn the decision of the lower court. However, its interpretation can promote the further development of the country’s crypto space regulatory framework.

Mining is one of those crypto-related activities that are still outside the scope of the “digital financial assets” law, which partially regulated cryptocurrencies earlier this year.Officials in the capital Moscow and Irkutsk and other regions called for make out This industry is a corporate activity under Russian law in order to properly supervise and tax its profits.

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