Putin Points to Energy Shortages as Russia Clamps Down on Crypto Mining
President Vladimir Putin has linked Russia’s growing energy deficits to the surge in cryptocurrency mining, explaining why some regions are now facing bans on the practice. His remarks come as electricity prices rise—a shift that could squeeze Bitcoin miners operating in the country.
The move, Putin says, wasn’t made lightly. Regional governors had been pushing for action, complaining that crypto mining was draining power supplies needed for infrastructure and industry. “We used to have a surplus in some areas,” Putin admitted during a recent forum. “Then mining took off, and suddenly there wasn’t enough energy left for basic development.”
The result? Seasonal or outright bans on mining in places like Siberia, the North Caucasus, and even occupied Ukrainian territories. A handful of regions dodged the restrictions, but federal officials warn the cuts might dent tax and energy revenues.
Electricity Costs Are Adding Pressure
Meanwhile, miners are grappling with another problem: higher power bills. Since July, electricity transmission rates have climbed, with further hikes expected by 2025. For an industry that guzzles energy—a single modern mining rig can chew through 2.5 MW monthly—the increases sting.
Oleg Ogienko, a blockchain and energy analyst, notes that while miners usually plan for gradual price adjustments, this year’s spikes outpace inflation. That’s making Russia less attractive compared to places like the U.S., where mining operations are expanding. “Investors are looking elsewhere,” Ogienko says.
A Legal Gray Area
Russia technically legalized crypto mining last year, requiring miners to register and pay taxes. But compliance has been spotty—only about 30% have signed up. The low rates and spare capacity in regions like Irkutsk once made them mining hubs. Now, with shortages, the government is scrambling to redirect operations to energy-rich areas while cracking down on illegal setups.
The irony? The bans might be backfiring. Legal miners argue they’re the ones bearing the brunt, while underground operations keep running. Authorities are weighing alternatives, like relocating farms to the North, but for now, the industry’s future in Russia looks uncertain.
One thing’s clear: as energy demands clash with crypto’s growth, the balancing act isn’t getting any easier.
