system. The first director of Dalstroy was Eduard Berzin, who between 1932 and 1937 established the infrastructure of the forced labour camps in Magadan. Berzin was executed in 1938 by Stalin, towards the end of the Great Purge.

The town later served as a port for exporting gold and other metals mined in the Kolyma region. Its size and population grew quickly as facilities were rapidly developed