Law-enforcement authorities in Ukraine have closed down what could be the biggest underground cryptocurrency mining farm in the country. The miners stand accused of stealing electricity, probably causing blackouts, according to officials.
The Security Service of Ukraine, also known as SBU, the nation’s main government security agency, said in a statement on Thursday that it had “exposed and documented a large-scale electricity theft” in which the offenders had mined cryptocurrencies in a former facility of JSC Vinnytsiaoblenerho, a local energy company, in Vinnytsia, a city in west-central Ukraine.
At the site, authorities seized a total of 3,800 game consoles, more than 500 graphics cards, 50 processors and draft documentation on power consumption, according to the statement.
The mining farm, which authorities said had been set up by residents of Kyiv and Vinnytsia, had caused monthly losses to the state worth about 5-7 million hryvnias (US$183,200 to US$256,400), according to preliminary estimates provided in the statement.
“Such illegal activity could lead to power surges and left people without electricity,” authorities said in the statement.
The SBU’s raid came just a few weeks after local law enforcement agencies in Ukraine, South Korea, the U.S., Spain and Switzerland arrested suspected members of a crypto-linked cybercrime group believed to be responsible for laundering more than US$500 million from ransomware attacks, according to a statement from crypto exchange Binance.
The group, known as Fancycat, was thought to have been involved in ransomware attacks such as Cl0p and Petya, and in laundering money involving dark web activity, according to Binance.
The crypto industry in Ukraine is not yet clearly regulated, and Ukrainian citizens can’t register crypto exchanges, although it is legal to mine and trade cryptocurrencies, according to a May report by local news outlet Kyiv Post.
The government, however, appears to be active in building its own mining facility. Earlier this year, officials from the Ministry of Energy discussed with a local state-owned nuclear energy firm and some local mining machine makers potentially building a Bitcoin mining center to take advantage of excess power, according to a February report by The Block. Meanwhile, Ukraine is also developing a central bank digital currency. In January, the country’s digital transformation ministry chose to cooperate with the Stellar Development Foundation to create a CBDC.