Crypto mining farms siphon millions from Mexico’s power grid, military raids reveal

A joint military and federal law enforcement raid in the rugged Sierra Norte region of Puebla state has highlighted the growing national security and economic challenges posed by clandestine cryptocurrency mining operations. The raid, conducted by Mexican federal prosecutors, the Navy, and Puebla state police, targeted a property in Tlaola, a mountainous municipality of approximately 20,000 residents. Authorities seized 300 graphics processing unit (GPU) mining rigs, high-voltage electrical transformers, medium-voltage terminals, and active satellite internet antennas. The operation was drawing electricity directly and illegally from a high-voltage transmission network fed by the historic Nuevo Necaxa dam, part of the country’s federal hydroelectric infrastructure.

The Federal Electricity Commission (CFE), Mexico’s state-owned power utility, is actively participating in the investigation. The CFE has long battled “non-technical losses”—a category that includes energy theft, meter tampering, and unauthorized grid connections. Between January and July 2024 alone, the CFE recorded non-technical losses of 6,346 gigawatt-hours, representing an estimated financial hit of 13.8 billion pesos (approximately $817 million USD).

Industrial-scale cryptocurrency mining operations are emerging as a sophisticated threat to Mexico’s national electricity grid, exploiting remote federal infrastructure and causing hundreds of millions of dollars in losses for the state-owned utility. Unlike Bitcoin mining, which typically relies on highly specialized Application-Specific Integrated Circuit (ASIC) machines, the seizure of GPU rigs in Tlaola indicates the operators were targeting alternative cryptocurrencies that utilize proof-of-work protocols modifiable for graphic cards. GPUs are highly versatile, allowing operators to quickly pivot between different digital assets to maximize profitability or obscure transaction trails.

Historically, these losses were attributed to low-level residential tampering, commonly known as *diablitos* (little devils). However, the rise of energy-intensive cryptocurrency mining has elevated the scale of theft to an industrial level, threatening grid stability in regional transmission corridors. The Sierra Norte region’s rugged topography and vast hydroelectric infrastructure have made it a prime target for illicit mining. The Nuevo Necaxa dam, completed in the early 20th century as part of North America’s first major hydroelectric projects, remains a vital source of electricity for central Mexico. Its remote geography provides both the heavy-load power lines required for mining and the isolation necessary to mask the operations’ high heat and noise footprints.

While cryptocurrency mining is legal under Mexican law, the unauthorized diversion of federal electricity is a serious federal offense. Investigators are now treating the Tlaola operation as part of a broader criminal network, with forensic accountants stepping in to trace the funding behind the specialized hardware and determine if the facility was used to launder the proceeds of organized crime.

Puebla State Security Minister Francisco Sánchez confirmed that investigators had been tracking reports of suspicious energy fluctuations and noise anomalies near the Necaxa complex. “The activity consumes a great deal of energy and generates a lot of noise, which is why operators seek out isolated and very remote locations,” Sánchez said, noting that a “very large power connection” ultimately gave away the Tlaola site. According to Sánchez, the dismantled site is believed to be part of a larger network utilizing the Sierra Norte’s hydroelectric corridor. Similar illegal operations have been detected in neighboring states, prompting authorities to expand their searches to adjacent municipalities.

The Tlaola raid is the latest in a series of law enforcement actions targeting high-tech energy theft in the region. Three other clandestine crypto-mining operations were dismantled across Puebla and the neighboring state of Tlaxcala in 2025. Furthermore, a mining farm discovered near the same Necaxa dam last year was allegedly operating out of properties belonging to the Mexican Electrical Workers’ Union (SME). The union historically represented workers in the central region’s power sector, raising concerns about potential internal collusion or the exploitation of union-held real estate to access the high-voltage grid.

Mexico’s struggle with utility-scale theft by crypto miners mirrors a growing global trend of crackdowns on energy piracy. Last year, Malaysian authorities seized more than 75,000 crypto mining rigs in a series of raids, estimating that the country’s state utility suffered $1.1 billion in stolen power. Similarly, federal police in Brazil recently shut down a massive unauthorized mining installation in Rio de Janeiro that was drawing directly from municipal power grids.