As money has evolved, so has the means of stealing it. Bitcoin, the most recent incarnation, is now regarded as digital gold but can only be created through a power-intensive process called mining. So crafty crypto criminals have turned to stealing electricity or computing power to secretly mine Bitcoin and similar cryptocurrencies.
As being borderless is one of Bitcoin’s USPs, we can showcase a selection of fascinating stories of the theft of electricity or computing to mine Bitcoin from all over the world.
We’ll start with three examples of inside jobs where employees took advantage of access to computing power and energy.
Russian scientists use supercomputer to secretly mine crypto
On February 9th, 2018, Interfax, the Russian news agency, reported that an unspecified number of engineers from the All-Russian Research Institute of Experimental Physics (RFNC-VNIIEF) in the city of Sarov had been arrested for mining cryptocurrencies.
There was an attempt at unauthorized use of official computing power for personal purposes, including for so-called mining
Tatyana Zalesskaya, head of the press service of the research institute.
The town of Sarov, 222 miles East of Moscow, is closed to the public, with a permanent perimeter fence patrolled by the military, given its connection to Russia’s nuclear research program.
Though the institute’s powerful computers were supposed to be offline, it seems that the temptation to mine Bitcoin over Vladimir Putin’s nuclear ambitions proved too great.
Ukraine police department caught mining crypto
Another example of employees moonlighting as crypto miners comes from Ukraine in 2018. 368.media reported that the communications department of the police directorate in Rivne had mined crypto at work for four months before being caught.
High school mining boiler room
The final example of an insider using access to facilities to mine Bitcoin comes from a High School in the town of Cohasset in Massachusetts.
As reported by the Boston Globe, an employee had set up equipment in a crawl space and allegedly stole $17,492.57 worth of electricity from April to December 2021.
The miner was discovered by the town’s IT director, who became suspicious of duct tape, wiring and computers that seemed out of place near the boiler room.
Crypto miner in Leicester diverted supply from a nightclub
Another case of electricity theft linked to crypto mining emerged around the peak of the last bull run in Leicestershire, England.
Authorities investigating the source of a power overload at a substation eventually discovered unmetered electricity worth £32,000 had been consumed in an industrial unit and a nightclub to mine crypto on 200 computers.
As reported by the Leicester Mercury in October 2021, the Crown Prosecution Service described the case as ‘highly unusual’.
Cheap power makes Malaysia a hotbed for illegal crypto mining
To be cost-effective Bitcoin miners need access to cheap and reliable power. It’s no surprise that Sarawak, with abundant hydropower, has seen more than its fair share of chancers tapping into that source to mine crypto.
In July 2021, Bernama, Malaysian News, reported that six people had been arrested in Miri, on the island of Borneo, in connection with power theft for bitcoin mining. 1,069 Bitcoin mining machines worth RM8.4 million were seized.
A further incident in Sarawak was reported in 2023 when 34 mining servers were confiscated. But the most extensive example of electricity theft for crypto mining in Malaysia occurred in Jahor State, in February 2021.
1,746 bitcoin (BTC) mining machines discovered across 21 locations had accessed close to £ 2 million of power.
Illegal crypto miners keeping Thai authorities busy
Bitcoin adoption and awareness are greatest where the need for a more stable currency is most acute. This is especially true in South East Asia, where domestic economies rely on remittance. So, our next stop on this world tour of Bitcoin mining heists is Thailand, offering several vignettes
In December 2022, the Bangkok Post reported that the Metropolitan Electricity Authority (MEA), the city’s energy regulator, had discovered a cryptocurrency miner running 223 computers. The secret mining setup stole some 10 million baht worth of unmetered electricity over a one-year period – close to a quarter of a million pounds of juice.
In May 2023, the MEA were in action again, shutting down two rogue crypto miners, this time in Samut Prakan, on the Gulf of Thailand. Electricians raised the alarm that in two separate houses, huge amounts of unmetered electricity were being siphoned off.
According to the Bangkok Post, in the first case, 60 mining rigs had used 300,000 Baht of electricity (£7,000) per month, while at a separate location, 200,000 Baht of power per month was supplying 20 mining rigs.
The biggest example of electricity theft for crypto mining from Thailand was also in December 2022, when 3,000 computers across multiple locations were discovered to have sluiced 500 million Baht’s worth of power – worth a whopping £11.3 million.
Hydro-Québec uncovers huge crypto mining related electricity theft
From around September 2020 to November 2021, the price of Bitcoin increased by around 600%, with other coins seeing even greater gains.
The FOMO may have motivated the theft of C$ 2 million of electricity from Hydro-Québec. The theft, traced to three locations, was reported in November 2021 by the Montreal Gazette, but the province’s public power utility believes it began in the Spring of that year.
Crypto illegally mined under Warsaw Courtroom
In November 2023, crypto mining rigs were discovered under the floor of the headquarters of the Supreme Administrative Court (NSA) in Warsaw, Poland.
The equipment was running clandestinely and clocking up electricity bills on the Court’s tab, estimated at several thousand zlotys a month, according to Polish news site TV24.pl.
The finger was pointed at the staff of an external IT firm that had been contracted by the NSA.
Indonesian authorities raid suspected illegal mining facilities
Over the 2023 Christmas period, Indonesian authorities raided ten sites suspected of mining bitcoin with electricity stolen from the national grid.
Indonesian authorities raided ten sites and detained 26 individuals over Christmas 2023 suspected of mining bitcoin with stolen electricity from the national grid.
As reported by Coindesk, the raided sites were in Medan, North Sumatra, where suspects had allegedly been stealing electricity for six months worth $100,000 using 1,314 bitcoin rigs.
Why electricity theft is on the rise
Stealing electricity to mine Bitcoin is an eye-catching headline, but it’s worth bearing in mind that Hydro-Québec was quoted as seeing 400 cases of electricity theft per year, and Canada isn’t alone in experiencing those levels.
According to Stay Energy Safe, there has been a 400% increase in people tampering with their energy supply in the UK since 2017, with Crimestoppers receiving 12,076 reports of energy theft in the 12 months leading up to April 2023.
Mining cryptocurrency is legal in most countries, with China being a notable exception. Though Bitcoin mining began as an activity that anyone could participate in using an entry-level PC, it has evolved into a commercial practice characterised by vast operations running warehouses of mining rigs designed solely to run Bitcoin’s mining algorithm.
Bitcoin Mining’s increasing power demand
Commercial Bitcoin miners must balance the cost of energy and the fixed costs of plant and equipment against the variable revenue from successfully winning Bitcoin’s pseudo lottery that currently pays the winner 6.25 BTC every 10 minutes.
That mining reward will halve in April 2024, putting more pressure on the viability of mining; the reduced incentives may discourage would-be electricity thieves or push more miners towards finding ways to reduce their power costs.
Bitcoin miners migrate to areas of abundant and cheap energy, which now includes methane flaring from oil refineries.
According to the Bitcoin Mining Council’s latest report, 59.9% of mining now comes from renewable sources (based on a survey of 43.4% of the global mining network), higher than most energy-intensive industries.
And mining power is only going in one direction. The Bitcoin network’s hash rate, a measure of the total power currently consumed by miners to secure it, hit all-time-high in October 2023 of 430,000,000,000,000,000,000 hashes per second.
But what price do you put on a sovereign form of money outside the control of governments? And if you think Bitcoin’s energy consumption is bad, AI’s response is, ‘Hold my beer’.
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