Russian Church Accused of Illegal Cryptocurrency Mining to Pay Higher Electricity Fees


The trend of home cryptocurrency mining has become popular across the world in the past few years as the profits associated with the mining increase by the year. The Irkutsk Regional Arbitration Court determined that the church was entitled to pay the local utility company, Irkutskenergo the fee owned as if it were corporate rates. The mining equipment discovered in the church was said to mine cryptocurrencies causing a surcharge of 1.1 million rubles ($16,600 USD).

As illegal cryptocurrency mining spreads across Russia and parts of Eastern Europe, Russian authorities are increasing their resources to clamping down these illegal mining firms. The increase in electrical consumption has seen a spike since the start of last year as more and more households set up mining rigs across these region.

Grace Church To Pay 1.1 Million To Local Utility Company

The Russian courts issued a ruling that will increase the electricity rates causing an impact in the subsidized sectors of the economy. Recently a church was accused of illegal crypto mining between May and August last year, and paid a surcharge of 1.1 million rubles ($16,600). The issue has been taken to the Regional Arbitration Court for a refund of the money.

In a reported case this week, The “Grace” evangelical community, a protestant church in Irkutsk Oblast, a region in the Siberian Federal District was found to be illegally mining cryptocurrencies and hence repaid the extra amounts of electricity bills owed at a higher rate than usual. The church was receiving an electricity bill rate cut and used this opportunity to mine cryptocurrencies, leading to excessive power consumption in the church.

The ‘Grace’ evangelic community however denied the charges of mining cryptocurrencies claiming the energy consumption spike that reached 2 million kWh in May through August, was from the energy needed for heating and to power printing equipment used to copy religious materials. The figure however still did not add up as the local utility company provided energy consumption data from a larger institution with more volumes of printing yet a lower value.

The church has most probably used the discovered hardware to mine cryptocurrency. Irkutskenergo says its electricity consumption suddenly spiked in May, last year and reached 2 million kWh in the months through August, RT reported. The church trustees said they needed the energy for heating and to power printing equipment used to copy religious materials. However, the judges noted that the period in question was in the summer and quoted data reflecting the consumption of much larger temples and printing houses in the region for comparison.

In their statement, Irkutskenergo inspectors found a server room on the 2nd floor of the building occupied by the church leading to conclusion of crypto mining. The statement to the Russian Abitration Court by these inspectors claimed the amount was sufficient further stating that “the claimant carried out activities related to ‘bitcoin mining’, which obviously did not pertain to religious activities.”

Russian Authorities Clamp Down More Crypto Mining Sites

The incident in the protestant church is amongst a list of illegal home crypto mining acts being investigated by the Russian administration. The number of cryptocurrency fanatics is increasing in Russia and other parts of Eastern Europe, and with most of these enthusiasts benefiting from the subsidized electricity rates, they are taking advantage of the system to mine cryptocurrencies illegally.

Energy for private individuals and other consumers including non-governmental organizations (NGOs), religious institutions and public institutions is cheaper in most of the countries. On average these consumers pay 1.22 rubles ($0.018 USD) per kWh during daytime and 0.70 rubles ($0.01 USD) at night.

Russian households have on their part installed mining rigs, GPU’s and other crypto mining equipment in their homes, garages, basements to mine cryptocurrencies illegally due to their preferential rate offered by the government subsidies. The court ruling does seem a bit arbitrary as even if the church consumed more than usual, it should still be entitled to a preferential rate.

In a case reported earlier in the year, mining equipment were found in Avtovaz assembly workshop, one of Russia’s largest car manufacturers in one of the control room. In the report, an employee at the firm installed the mining equipment in November 2017, costing the firm a total of at least 600,000 rubles ($9,085) worth of electrical power to mint coins. The total profit of crypto mined from the specialized mining hardware was estimated at 1.2 million rubles ($18,170).

Authorities in Russia are continuing their operations to clamp down these illegal mining activities being set up as it affects the communities’ power supply given the extreme power supply cryptocurrency mining needs.

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