Russian law enforcement agencies are investigating the suspected theft of mining hardware worth about $1.9 million. The powerful computing equipment disappeared from a crypto-mining hotel in Irkutsk, and its owner is accused of massive fraud.
100 Russians lose mining machines worth 100 million rubles
Policein Russia’s Irkutsk Oblasthave launched an investigation into the operator of a mining hosting facility suspected of defrauding customers and stealing expensive coin minting hardware, TASS news agency reported, citing the oblast’s Interior Ministry Main Accounting Office.
The law enforcement agency explained that in hopes of a quick payoff, the miner gave the devices to the people who operated the mining hotel. At some point, the latter stopped all payments to customers and did not return the expensive machines.
“A criminal case was opened on the basis of these facts under Part IV of Article 159 of the Criminal Code of the Russian Federation (large-scale fraud). Various physical evidence, including computer equipment and documents, were seized from their offices,” the statement detailed.
Investigators were able to establish that between November 2021 and May 2022, the suspects lured people who wanted to install coin minting hardware in mining hotels. They were offered rental and electricity rates far below actual market prices.
At the same time, they were urged to turn over their equipment as soon as possible because of limited rental space. The owners of the mining equipment were not told where the equipment would be placed, and only representatives of the hosting service had access to the mined coins.
Russian police are currently searching for the scammers. Their actions have resulted in the loss of approximately 100 people. They had given the organizers of the mining hotel an estimated total of 100 million rubles, or nearly $1.9 million worth of equipment.
In the Irkutsk region, which offers some of the lowest electricity rates in the country, starting at just $0.01 per kWh in rural areas, crypto mining is surging, often with farms in basements and garages, powered by subsidized household electricity.
For this reason, Irkutsk Oblast has been called Russia’s mining capital. Earlier this year, local electricity suppliers complained about a surge in electricity consumption in residential areas, which they attributed to home mining.
Russian media reports revealed that planes carrying used mining equipment from China, which cracked down on the industry in May 2021, arrived in the region again this year, revealing an increase in cases of mining hardware theft. Russia plans to legalize crypto mining, which could benefit from its abundant energy resources and cool climate.
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