FRom January 1, 2025, cryptocurrency mining will be deemed illegal in Chechnya, with violators facing severe punishment. This move, spearheaded by Chechen Head of State Ramzan Kadyrov, aims to protect public welfare by addressing the significant risks posed by crypto mining. Lawmaker Adam Delimkhanov emphasized that crypto miners will be treated as terrorists due to the harm their actions cause to society.
Chechen Authorities’ Stance on Crypto Mining
Chechen authorities have taken a firm stance against cryptocurrency mining, equating it with terrorism. Adam Delimkhanov, speaking on behalf of Ramzan Kadyrov, stated that the high electricity demands of mining operations can destabilize power supplies and disrupt daily life. This crackdown is part of a broader initiative in Russia to address energy shortages caused by the industry.
“We cannot allow a few individuals to jeopardize the well-being of our entire community,” Delimkhanov remarked.
The South China Morning Post quoted Liu Zhengyao, a lawyer at ZhiHeng Law Firm in Shanghai, saying, “It can be foreseen that mainland China’s regulatory attitude towards cryptocurrencies will continue to tighten in the future,”
Impact on Local Communities
The new law aims to protect local communities from the adverse effects of crypto mining. Authorities have warned that any mining-related electricity shortages in villages, districts, or cities will be met with swift action, including arrests and imprisonment of miners. This move is intended to ensure the stability of electricity supplies for ordinary residents.
“Our priority is to safeguard the interests of our people,” Kadyrov stated.
Broader Russian Initiative
The crackdown on crypto mining in Chechnya is part of a larger effort by the Russian government to curb the impact of the industry on the country’s energy infrastructure. Last October, Russian Deputy Energy Minister Evgeny Grabchak announced a ban on Bitcoin mining in several regions, including Dagestan, Donetsk, Lugansk, and parts of the Irkutsk Region. These restrictions aim to alleviate electricity deficits that have strained local power grids.
“The energy demands of crypto mining are unsustainable and pose a threat to our national grid,” Grabchak explained.
Technological Solutions
Amidst the crackdown, technological advancements offer hope for curbing illegal mining. AI-powered smart meters, developed by St. Petersburg State University, Lartech, and the Energomera group, are designed to detect illegal consumption patterns, such as crypto mining. These devices represent a promising solution to improve energy system transparency and security.
The Chechen authorities’ decision to crack down on cryptocurrency mining and label miners as terrorists reflects a broader effort to address the significant risks posed by the industry. By taking these measures, Chechnya aims to protect public welfare and ensure the stability of electricity supplies for its residents.
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