Investigators find scores of crypto mining farms disguised as chicken coops

Crypto-keen Russians are going to extraordinary lengths to disguise their clandestine mining activities, say Siberian power chiefs.

Irkutskenergosbyt, the state-run power provider in the Bitcoin mining hotspot of Irkutsk, has created a map of some 8,000 suspected illegal mining locations. These are approximate figures, the power firm told Russian media outlet SIA, adding that the “actual number of violators is significantly higher.”

“Crypto-mining residents try to blame their excess power consumption on electric car charging or heating chicken coops,” Irkutskenergosbyt director Andrey Kharitonov told SIA. “In one case, a resident claimed they were drying wood to build a house, even though the property was empty. They ended up ‘drying’ [$12,000].”

Illegal mining has become a scourge in many Russian regions, driving many parts of the country to shut down permit-holding industrial miners to keep power grids stable. The authorities say they are fighting back and will use artificial intelligence-powered tools to hunt illicit miners.

Unorthodox hiding places

Irkutskenergosbyt began prosecuting illegal miners in 2019 and has filed 2,170 lawsuits to date.

The firm has demanded that illegal miners hand over a combined total of $18.5 million in compensation for the electricity they have stolen or misused.

Courts have handed out fines worth around half that amount, but over 100 citizens have instead settled out of court.

“We are still working on over 300 cases,” Kharitonov said. “Court proceedings are slow. On average, a single lawsuit can take up to a year to complete.”

Illegal crypto miners have something of a track record when it comes to finding unexpected places to squirrel away their rigs in Russia.

Last year, power providers in Dagestan’s Levashinsky District found 69 rigs operating in a greenhouse that had been set aside for agricultural use.

The greenhouse’s owner used cut-price subsidised power, reserved for agricultural producers, to mine thousands of dollars' worth of crypto.

“Instead of growing vegetables, the farmer decided to engage in a completely different kind of business activity,” Arsen Gadzhiev, the acting head of the Dagestan power provider Dagenrego, told Russian media outlet Vesti. “Now he will have to answer to the law for the damage he has caused.”

In August, investigators in Krasnodar found crypto enthusiasts busily mining coins in a paper mill.

In September, meanwhile, police in Southern Siberia found 21 ASIC Bitcoin mining rigs hidden in bushes in the middle of a forest, housed in flimsy makeshift packing crates.

And as recently as this week, Siberian power officials say they found illegal miners running rigs in a disused petrol station. The pumps were all empty, but the operators had hired security guards to protect their network of 10 ASIC miners.

Tim Alper is a News Correspondent at DL News. Got a tip? Email him at [email protected].

View source version on dlnews.com: https://www.dlnews.com/articles/regulation/investigators-find-crypto-mining-farms-disguised-chicken-coops/

View source version on dlnews.com: https://www.dlnews.com/articles/regulation/investigators-find-crypto-mining-farms-disguised-chicken-coops/