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Utility is looking for $800,000 from Russians who are mining cryptocurrency using cheap power.

The city of Irkutsk's major utility provider is attempting to collect about $800,000 from crypto farm owners who are said to have caused an increase in electricity consumption in the Russian province. The supplier accuses the miners of misusing low-cost domestic electricity for commercial purposes.

Irkutskenergosbyt, the local power distributor in Irkutsk Oblast, has filed 137 lawsuits against customers who are utilising subsidised electricity to mint digital currencies in underground and garage mining facilities. The utility intends to recoup 63 million Russian rubles (about $790,000) in compensation by taking the cases to court, according to Tass, citing its director, Andrey Kharitonov.

These home miners, according to the business, are involved in entrepreneurial operations while paying for their electricity at population rates, which are four times lower than commercial prices. The owners of subterranean crypto farms are also putting more strain on the system in residential areas, causing outages and breakdowns.

Over 1,200 examples of 'grey' mining were found in 2021 alone, according to Kharitonov. Nineteen of the 137 lawsuits were settled for a total of 21 million rubles. He explained that all other claims are still being considered, and that no cases have been lost thus far.

Cryptocurrency mining, according to the CEO, considerably increases the amount of electrical energy consumed in the region. While consumers of Irkutskenergosbyt used roughly 7 billion kilowatt-hours (kWh) in 2020, the total was closer to 8 billion kWh in 2021. The number of private dwellings and apartment buildings, on the other hand, has stayed virtually stable.

The Irkutsky and Shelekhovsky districts have the highest concentration of mining farms, according to the electricity utility. The prices of electricity in these remote locations are lower than in Irkutsk. Households in some portions of the region have access to the cheapest electricity in Russia for only 0.86 rubles ($0.01) per kWh, while companies pay 3.6 rubles per kWh.

The miners who lost in court will now be required to pay not just the difference in price for the power they have already consumed, but also to sign new commercial contracts with Irkutskenergosbyt. After a considerable amount of mining equipment was brought from China when Beijing initiated a statewide crackdown on the industry in May last year, their region became known as Russia's "mining capital."

Igor Kobzev, the governor of Irkutsk Oblast, joined rising calls in October 2021 to classify cryptocurrency mining as a form of business activity and impose higher electricity bills and taxes on miners. The Russian federal government granted Russian regions the authority to set local electricity pricing in residential areas in December.

The future of mining, as well as other crypto-related operations, in Russia is still up in the air. The State Duma has tasked a working group with drafting legislation to close the regulatory loopholes left after the adoption of the bill "On Digital Financial Assets." The Central Bank of Russia recommended banning bitcoin mining as part of a broader crypto ban last week, but media reports indicated that its tough approach is not gaining traction with other government institutions.