Russian Energy Ministry rubbishes claims it is poised to ban crypto mining in Moscow

The Russian Energy Ministry has no plans to ban crypto mining in Moscow and the surrounding area, despite recent calls for a ban from city authorities.

Top Moscow officials have not yet asked the ministry for a ban, said Andrey Maksimov, head of the Ministry of Energy’s electrical power development department, Russian media outlet RBC reported.

“There’s a government-issued decree that dictates that regions that want the central government to issue a regional mining ban must submit an official request via their governor,” Maksimov said. “The governor of Moscow Oblast has not sent us any such request.”

The comments come just over a week after the Energy Minister of the Moscow Oblast, Sergei Voropanov, proposed banning cryptocurrency mining in the region, per Russian news agency TASS.

The Russian crypto mining sector has experienced rapid growth in recent years, but has encountered serious problems in the past few months. Power shortages have led to regional mining bans, and the head of the country’s biggest crypto mining firm is facing a tax fraud wrap.

‘Extreme measures’ needed

Voropanov said “an extreme measure” was needed to reduce the load on the capital’s power distribution network.

At least 65 crypto mining centres operate in Moscow and the surrounding region, per Ministry of Energy data. These centres use a total capacity of 734 megawatts. Almost 20 of these facilities operate on a large scale, using a total combined capacity of 233 megawatts, the ministry says.

But Moscow officials say the actual number is higher.

“According to our estimates, crypto miners are using 1 gigawatt of power on their activities [in Moscow],” Voropanov said. “Mining has no positive effect on the regional economy.”

Moscow officials have also proposed alternatives to a ban. These include a law that would prohibit multiple data centres with individual capacities of over 10 megawatts from operating in the same area.

Other city officials say crypto miners should be banned from using direct connections to energy facilities, TASS reported.

The list of regions with mining bans continues to grow. It now includes Dagestan, Ingushetia, Kabardino-Balkaria, Karachay-Cherkessia, North Ossetia, Chechnya, parts of Southern Siberia, Buryatia, and the Zabaykalsky Krai.

The Kremlin has also imposed mining bans on Russia-controlled parts of Ukraine.

Tim Alper is a News Correspondent at DL News. Got a tip? Email him at [email protected].