Two Russian Regions to Develop Large Scale Crypto Mining

Russian Regions to Develop Large Scale Crypto Mining

The governors of two Russian regions have indicated their readiness to accommodate large crypto mining facilities. Two of the westernmost subjects of the Federation – Kaliningrad and Leningrad – are willing to welcome miners and want to get involved in “bitcoin production”. Local authorities have expressed intentions to take mining out of garages and scale it up to industrial level. They are now pressing Moscow for regulations.   

Also Read: Russia Ready for Migrant Bitcoin Miners Influx

One Huge Mining Farm

Many are interested in cryptocurrencies in Kaliningrad Oblast, its governor Anton Alihanov said on the sidelines of the Russian Investment Forum in Sochi. In the future, the region may become one huge mining farm, he told RIA Novosti.

“We have a lot of people that show interest [in crypto mining]. But doing everything right is pretty complicated and you don’t want to set the house on fire,” Alihanov said. “That’s why we have a ‘mining hotel’, where guys know how to set up the cooling systems, so that nothing gets burned”, the official added, demonstrating technical knowledge of the subject.

If you are a miner, you’ve come to the right place. We can become one huge mining farm.

Russian Regions to Develop Large Scale Crypto MiningAlihanov also noted that Kaliningrad Oblast has developed a booming greenhouse sector producing tons of strawberries. Greenhouses need heating during colder months and mining hardware produces a lot of heat. Mining farms can actually be built close to the strawberry fields to heat the greenhouses.

Still wary of buying cryptocurrencies, the governor admitted he had some “rich experience” with stock trading in the past. “Stocks, bonds, futures – these are very risky things. I don’t have funds that I am ready to part with at any moment. For now I keep my distance,” Anton Alihanov said. He added, however, that when crypto markets become more stable, he may have a second thought.

Miners to Use a Decommissioned NPP

Other local officials have also announced intentions to conduct mining business in their regions. Authorities in Leningrad Oblast, bordering the federal city of Saint Petersburg, plan to create a tech park for cryptocurrency miners. It will be built on the premises of the nuclear power plant in Sosnovy Bor, governor Alexandr Drozdenko revealed. The Leningrad Atomic Electro-Station (LAES, or LNPP) will be decommissioned in 2020-2021.

Russian Regions to Develop Large Scale Crypto MiningA new power plant will replace the RBMK units at LAES, which now produces about 50% of the region’s electricity. LAES-2 will be equipped with the safer, “post-Fukushima” WWER-1200 reactors. LAES is the largest electricity generating facility in Russia’s northwest.

The economic department of the Leningrad administration and Rosatom have already approved the project to mine cryptos at LAES, Drozdenko told RIA Novosti. “What we need for mining is cheap electrical energy, cooling system and reliable transmission grid. We have all that at the Leningrad NPP,” he said.

Russians are mining in their garages. We want to do it on an industrial scale.

According to the governor, two outstanding issues postpone the realization of the project. “First – we have to wait until the old equipment is removed [after the decommissioning]. Secondly, we need some regulatory framework that would allow us to mine, to produce bitcoin,” Alexandr Drozdenko explained. He added that “serious negotiations” on regulation are underway between his administration and the federal government.

With cheap energy, developed electrical infrastructure and cool climate, Russia has what it takes to accommodate local cryptocurrency miners and welcome foreign investors. Authorities in regions with great potential to develop the sector are impatient and expect new regulations from Moscow as soon as possible.

Do you think the government in Moscow will listen to regional authorities and adopt legislation with incentives for crypto miners? Tell us in the comments section below.


Images courtesy of Shutterstock. 


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Five Siberian Power Plants Attracting Crypto Miners With Surplus Electricity

Five Siberian Power Plants Attracting Crypto Miners With Surplus Electricity

Cryptocurrency miners will soon be able to benefit from surplus electricity and the cold climate at five power plants located in Siberia. Russian energy company En+, which owns those power plants, is already in talks with investors to build crypto mining farms near them.

Also read: Japan’s DMM Bitcoin Exchange Opens for Business With 7 Cryptocurrencies

Five Power Plant Sites

Five Siberian Power Plants Attracting Cryptocurrency Miners With Surplus ElectricityRussian energy company En+ Group is actively preparing to offer electricity to cryptocurrency miners at some of its power plants, Vedomosti reported on Wednesday.

En+ CEO Maxim Sokov was quoted saying, “We are talking about five sites.” They are in the Irkutsk Oblast, a federal subject of Russia, located in southeastern Siberia. Two sites are near the town of Ust-Ilimskin, one is near the city of Bratsk, and the other two are near the city of Irkutsk.

Five Siberian Power Plants Attracting Cryptocurrency Miners With Surplus Electricity
En+ CEO Maxim Sokov.

Near Ust-Ilimsk, on the Angara River, En+ has a hydropower power plant (HPP) with a capacity of 3,840 MW and a coal-fired combined heat and power plant (CHP) with a capacity of 525 MW.

Near Bratsk, “En + has a hydroelectric power plant with a capacity of 4,500 MW,” the publication noted.

Near Irkutsk, which is also the administrative center of Irkutsk Oblast, “there are two sites: a hydroelectric power plant with a capacity of 662 MW and a [coal-fired] combined heat and power plant with a capacity of 655 MW,” the news outlet detailed.

En+ said the cold climate of the region around the three areas and the availability of cheap electricity make the condition attractive for cryptocurrency mining.

Attracting Crypto Miners

Sokov revealed that En+ is currently negotiating with several investors, “including international ones – Chinese and American,” for “the construction of mining farms that will act as consumers of electricity,” Ria Novosti described, adding:

En+ will offer miners to build farms to produce cryptocurrencies next to En+ power plants in Irkutsk, Bratsk, and Ust-Ilimsk.

Five Siberian Power Plants Attracting Cryptocurrency Miners With Surplus ElectricityThe CEO emphasized that his company will benefit from attracting miners from China, where strict prohibitive regulation is now in force.

According to Vedomosti, the total demand for power supplies from cryptocurrency miners could reach 100 MW for En+ Group in 2018, and the group could earn about 980 million rubles (~USD$17.2 million). Natalia Porokhova, Head of Research and Forecasting Group at ACRA estimates that each “100 MW can bring En+ from 10 to 15 million dollars,” the news outlet added.

While Russian aluminum producer Rusal, which En+ has a controlling stake in, is currently the main user of the company’s hydropower, En+ believes that it could use up excess capacity and diversify its customer base by offering electricity supplies to crypto miners.

Cryptocurrency mining is currently unregulated in Russia. However, the regulators are drafting a bill for its regulation. Earlier this month, the Bank of Russia said that it will allow crypto mining in the country but proposes that miners sell their coins overseas.

Do you think crypto miners will move to Siberia to set up mining farms? Let us know in the comments section below.


Images courtesy of Shutterstock and En+.


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FBI Claims Arrested Cyber Crime Syndicate Co-Founder Medvedev Worth $800M+ in BTC

Cyber Crime Syndicate Co-Founder Worth 100,000 BTC Arrested in Thailand

The Federal Bureau of Investigation (FBI) has claimed that Sergey Sergeyvich Medvedev, a Russian national recently arrested in Bangkok, was the co-founder and second in command of the Infraud group – a notorious international cyber crime syndicate. It has been reported that at the time of his arrest, Mr. Medvedev was in possession of more than 100,000 bitcoins.

Also Read: Japan Cracks Down on Foreign ICO Agency Operating Without License

Accused Cyber Crime Syndicate Co-Founder Arrested in Thailand

Cyber Crime Syndicate Co-Founder Worth 100,000 BTC Arrested in Thailand
Sergey Medvedev arrested by Thai police

Sergey Sergeyvich Medvedev is accused of being the co-founder and second in command of the transnational crime syndicate, Infraud. The dark-web marketplace associated with the group was seized and taken offline by U.S. authorities.

Mr. Medvedev, a Russian national, fled to Thailand six years ago. Thailand’s Crime Suppression Division (CSD) identified the thirty-one-year-old as being located in Bangkok following an investigation prompted by American requests for cooperation with the FBI.

Maj. Nathapol Ratanamongkolsak of the CSD stated that “The United States […] requested assistance from Thai police, and the police commissioner ordered the Crime Suppression Division to work on this case in late 2017.”

Mr. Medvedev in Possession of Over 100,000 Bitcoins

Cyber Crime Syndicate Co-Founder Worth 100,000 BTC Arrested in ThailandMr. Medvedev was arrested during a raid on his apartment in the Sukhumvit area, conducted by 30 CSD officers. The CSD officers seized numerous documents and a notebook computer from Mr. Medvedev.

CSD investigators have claimed that Mr. Medvedev was trading illegal products online in exchange for bitcoin. Thai media outlet, Bangkok Post, has reported that “judging by the evidence obtained during the Feb 2 raid, [Mr. Medvedev] had more than 100,000 bitcoin[s]” – at the time valued at approximately $800 – $900 million USD.

Thailand’s Central Investigation Bureau (CIB) chief, Thitiraj Nhongharnpitak, has confirmed that the raid took place. However, the CIB chief has declined to issue further details regarding the operation, stating that such is an international police matter and that more information will be made public soon.

FBI Cracks Down on Infraud

Cyber Crime Syndicate Co-Founder Worth 100,000 BTC Arrested in ThailandIt is alleged that Infraud was created during 2001 by Mr. Medvedev in partnership with Svyatoslav Bondarenko in Ukraine. Infraud has been described as a major hub for credit card fraud, with Deputy Assistant Attorney General David Rybicki stating that the site was “the premier one-stop shop for cybercriminals worldwide.”

Reports have indicated that similar operations designed to arrest 18 members of Infraud have been carried out in over a dozen different countries – expanding on prior efforts by the FBI to crack down on Infraud, which have previously seen the arrest of 32 individuals suspected of criminal involvement with the group.

Maj. Nattapol Rattanamongkol stated “This is an operation by the [US] Department of Homeland Security that involves spontaneous [raids] in 14 countries.”

What is your reaction to the arrest of Mr. Medvedev? Share your thoughts in the comments section below!


Images courtesy of Shutterstock, Khao Sod


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Russia Drafts Bill to Accredit ICO Issuers – Public Comments Wanted

Russia Drafts Bill to Accredit ICO Issuers - Seeks Public Comments

The Russian government is drafting a bill to introduce the accreditation of initial coin offering issuers. Accredited organizations must comply with a set of rules, including having 100 million rubles capital, and are subject to inspections every three years. The regulators are currently accepting public comments on the proposal.

Also read: Japan’s DMM Bitcoin Exchange Opens for Business With 7 Cryptocurrencies

Accrediting ICO Issuers

Russia Drafts Bill to Accredit ICO Issuers - Seeks Public CommentsThe Russian Ministry of Communications and Mass Media has submitted a proposal to accredit the issuers of initial coin offerings (ICOs) “on a voluntary basis for a period of five years,” the document reads.

This proposal details the procedure for accrediting organizations that issue digital tokens. It has been published on the Russian government’s portal of normative legal acts and the regulators are currently seeking public comments on the plan.

A digital token is defined in the proposal as “a record in a distributed information system created using cryptographic (encryption) means that certifies that the holder of the digital token has the right to receive from the person who posted the initial (initial) digital token of the initial (nominal) value token by presenting this token.” Under the proposal, Tass summarized:

The organization must comply with a number of criteria: registration in the territory of the Russian Federation in accordance with the legislation on state registration of legal entities; a charter capital of at least 100 million rubles; a license to develop, produce and distribute cryptographic funds; and a special account with a bank, obtained as a result of the sale of digital tokens.

Mandatory Rules

Russia Drafts Bill to Accredit ICO Issuers - Seeks Public CommentsThe accredited ICO issuers are required to adopt a number of mandatory rules. Firstly, they must “redeem digital tokens at a nominal price from any bearer of a digital token on the basis of an irrevocable public offer,” the news outlet described. Secondly, they are obligated to “issue digital tokens for Russian rubles through a cashless settlement.” In addition, they have a “duty to use funds received from purchasers of digital tokens, only for purposes related to maintaining the ability to fulfill the obligation to redeem digital tokens at a nominal price.”

The publication further noted:

The Ministry of Communications will decide on accreditation or refusal of accreditation within 30 days after receiving the application. Accredited organizations will also be subject to inspections every three years (with the exception of unscheduled inspections) for compliance with the requirements of the provision.

Despite the strict requirements for would-be ICO issuers, the Minister of Communications and Mass Media, Nikolai Nikiforov, commented last week that “it is very important in all projects of the digital economy not to over-regulate what is just emerging,” according to Tass. RBC also quoted him describing:

We decided that we should go the way of accreditation and get some professional organizations to implement the first real projects. Otherwise, our country will become technologically backward.

What do you think of this ICO accreditation proposal? Let us know in the comments section below.


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Nuclear Engineers Arrested for Mining Cryptocurrency Using Government Supercomputer

Russian Nuclear Engineers Arrested for Secrectly Mining Cryptocurrencies

Russian nuclear scientists working at a top-secret nuclear center have been arrested for allegedly using the center’s computer facilities for the purpose of mining cryptocurrencies.

Also Read: Russia’s Largest Bank Caught Employees Mining For Crypto 

 Russian Nuclear Engineers Arrested for Secrectly Mining Cryptocurrencies

Russian Nuclear Engineers Arrested for Secrectly Mining CryptocurrenciesEngineers working for the All-Russian Research Institute of Experimental Physics at the Federal Nuclear Centre in Sarov have been arrested for using the power of a supercomputer to mine cryptocurrencies. The Federal Nuclear Center in Sarov is a restricted area, with the Soviet Union’s first nuclear weapon having been developed at the facility.

It has been reported that the engineers commandeered a supercomputer which is not meant to be connected to the internet in order to prevent intrusion. Upon connecting the computer to the internet, the nuclear center’s security department was immediately alerted. The unnamed scientists are now in the custody of the Federal Security Service.

Tatyana Zalesskaya, the head of the research institute’s press service, stated that “There has been an unsanctioned attempt to use computer facilities for private purposes including so-called mining,” adding, “As far as we are aware, a criminal case has been launched against them.” Zalesskaya noted that similar attempts have been made by the employees of Russian private companies possessing large computation power, describing such as a “criminal offense.”

Crimean Officials Previously Fired for Mining Cryptocurrencies

Russian Nuclear Engineers Arrested for Mining CryptocurrenciesIn October 2017, two officials of the Crimea Council of Ministers were fired for mining cryptocurrencies using government computer facilities. The Russian Federal Security Service identified the unsanctioned activities and fired the officials before they were able to realize their profits.

The Chairman of the Anti-Corruption Committee of the Republic of Crimea, Alexander Akshatin, stated at the time that the culprits “put malicious software on the server of the Crimean government, which opened access to the information stored on it. Concurrently, more than a dozen computers in the basement of the building were also used which gave this same access.”

Do you think that employees using their employers’ computer facilities and power to mine crypto will become a widespread issue in future? Share your thoughts in the comments section below!


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Russia’s Largest Bank Caught Employees Mining For Crypto

Russia’s Largest Bank Caught Employees Mining For Crypto

Russia’s largest bank, the state-controlled Sberbank, has reiterated that it is not mining cryptocurrencies. However, the bank says that it has often caught its employees crypto mining using the bank’s equipment.

Also read: Japan’s DMM Bitcoin Exchange Opens for Business With 7 Cryptocurrencies

Sberbank Claims It’s Not Mining Crypto

Russia’s Largest Bank Caught Employees Mining For CryptoThe state-controlled Sberbank is the largest bank in Russia and the third largest in Europe. The bank is in possession of a large quantity of graphics cards that can be used for cryptocurrency mining. The bank’s senior vice president, Alexander Vedyakhin, apologized publicly in November of last year for causing a shortage of these cards in the Russian market, as news.Bitcoin.com previously reported.

Russia’s Largest Bank Caught Employees Mining For Crypto
Herman Gref.

Since admitting to scooping up most of the graphics cards on the domestic market, Sberbank has maintained that it is not mining cryptocurrencies with them. Instead, Vedyakhin claimed these cards are for the bank’s “laboratory for the development of artificial intelligence,” Tass quoted him.

On Wednesday, Chairman of the bank’s Board, Herman Gref, reiterated at the “Leaders of Russia” forum that Sberbank is not mining cryptocurrencies on a corporate level. However, the publication quoted him proclaiming:

We bought [graphics] cards of a slightly different configuration. Sberbank is not engaged in mining, but we often catch employees who are engaged in mining on the bank’s equipment.

Gref elaborated that he believes the bank is not interested in mining because it is a “primitive business,” adding that “I can tell you a dozen other investment objects with higher yields,” RBC detailed.

Sberbank’s Engagement with Cryptocurrencies

Russia’s Largest Bank Caught Employees Mining For CryptoAt the end of January, Sberbank announced that its subsidiary in Switzerland will start offering cryptocurrency trading. This Swiss part of the plan is to “avoid violating domestic rules,” Reuters explained. Meanwhile, Russian regulators are working on finalizing the legal framework for cryptocurrencies and initial coin offerings (ICOs).

In addition, the bank opened a blockchain laboratory last month for researching the latest technology in this area. “The laboratory will cooperate with start-ups, associations and various communities,” RBC conveyed, adding that the bank will introduce “educational programs in this area.”

Gref also recently stated that he “opposes the ban on cryptocurrency and calls for tolerance and patience in their regulation,” Tass described and quoted him saying:

Before trying to regulate, you do not need to rush, but you do need to maintain a normal background around the technologies of blockchain and cryptocurrency.

Do you think Sberbank is mining cryptocurrencies? Let us know in the comments section below.


Images courtesy of Shutterstock and Sberbank.


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