KEY POINTS

  • Deputy Director, Unidentified Associates Under Investigation
  • An illegal crypto mining was built inside the prison in November 2021
  • Law enforcement authorities seized 1,476 mining devices in Dagestan last week

A psychiatric clinic in one of Russia’s oldest prisons has been secretly turned into a cryptocurrency mining farm, law enforcement officers have discovered. The deputy manager and unidentified associates are now under investigation for their alleged role in building the farm.

The facility has been operating inside the central Moscow prison from November 2021 until February 2022, drawing electricity paid for by the government, authorities found.

The bust occurs a week later officers of the Russian Federation and the Russian Republic of Dagestan discovered a large cryptocurrency mining company in Makhachkala, the capital of the republic. Law enforcement officers confiscated 1,476 devices used to mint digital currencies, Tass news agency reported.

The US Treasury Department’s Office of Foreign Assets Control sanctioned Russian Bitcoin miners in April after the country’s unprovoked invasion of Ukraine, which many experts say could hamper the crypto industry. -the country’s multi-billion dollar currency, as it ranks third in the world’s largest mining. center.

Torture and sexual abuse of inmates is systemic in Russia’s vast prison system, prison guards say Photo: AFP / Dimitar DILKOFF

The facility discovered in Moscow’s Prisión de Butyrka, built in 1771, housed cryptocurrency minting equipment that consumed around 8,400 kW of electricity, costing the government more than $1,000 (62,000 rubles). ), Kommersant reported.

The investigative team said the deputy director may have committed “actions that clearly go beyond his powers, thereby significantly violating the legally protected interests of society or the state”. Russians condemn illegal crypto miners due to recurring power outages in their region.

Russia accounted for around 11% of the global processing power used to mint new cryptocurrency, according to a Cambridge Center for Alternative Finance report in August 2021. The Russian Central Bank lobbied earlier this year to ban mining cryptocurrency in the country, but Russian President Vladimir Putin supported and, instead of blocking it, wanted to regulate it.

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