A report in the South China Post earlier this week tells the story of a family in Southern China accused of stealing high levels of electricity to fund their Bitcoin mining enterprise. It’s just one more example of a nation where cryptocurrency is officially banned, and yet its citizens are seemingly obsessed by it. Unfortunately, so are Chinese criminals.
According to the Chinese daily news newspaper and website The South China Post, a family household in Southern China has been caught stealing electricity to power a Bitcoin mining operation, in what is clearly the latest example of China’s growing obsession with cryptocurrency.
15 Mining Computers, 56 Mobile Phones
The local electricity company – China Southern Power Grid Company – first detected something was untoward during a routine audit. Grid workers from the Meizhou municipal branch became suspicious when they noticed that several of the grid’s power cables were connected to additional cables which were leading off elsewhere.
Upon further investigation, the cables ran down an alley and then led to the upper floor of a house in Fengshun. After obtaining a search order, the authorities discovered 15 heavy-duty, ultra-powerful crypto-mining computers and 56 mobile phones, all of which were set to mine cryptocurrency of some denomination.
Mining a single Bitcoin consumes an average of 18,000 kilowatt hours (kWh). The family had used 32,940 kWh of stolen electricity before being rumbled. The family have not yet been named. Bitcoin mining is not actually banned in China, although there has been a major crackdown on initial coin offerings and trading platforms. Thus far, the family’s only crime is stealing electricity.
600 Bitcoin Mining Computers Seized A Week Earlier
It was the second such case reported within a week in China. On April 25, Tianjin Municipality police seized 600 Bitcoin mining computers after the local electricity grid displayed abnormal power usage. Eight high-power cooling fans were also discovered and confiscated. Chinese local police claimed it was the largest electricity theft case in years.
Mining of cryptocurrency is a means of making money for anyone with the necessary equipment, internet access and enough electricity. Bitcoin is the world’s best-known and most valuable cryptocurrency. Mining any significant amount of Bitcoin requires specialized hardware known as ASICs. The miner will also be required to solve a puzzle and place the next block in the chain – the process by which Bitcoin transactions are verified. A single Bitcoin “coin” is currently worth around $9,000.
China’s Concerns Over Organized Crime & Crypto
While the Chinese authorities are clearly no fans of cryptocurrency, a big concern with the Chinese police is the potential for organized crime gangs to set up large Bitcoin mining warehouses packed full of stolen computers and other equipment, who would then tap into a nearby power supply and steal industrial levels of electricity.
Already there has been an incident where a Bitcoin miner was shot by to gangsters after taking $1.7 million from them. The miner had apparently earned the men a $370,000 installment on their investment, but because he hadn’t changed it to fiat currency which had been part of the agreement, one of the men shot the miner in the leg as punishment. The miner survived the shooting, and the two gangsters were later arrested.