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Saturday, Dec 2, 2023
Mugglehead Magazine
Alternative investment news based in Vancouver, B.C.

Bitcoin

Illegal Bitcoin miners steal USD$2.4 million of electricity in Taiwan

Police confiscated 700 mining machines in raids conducted from March to September

Illegal Bitcoin miners steal USD$2.4 million of electricity in Taiwan
Amateur cryptocurrency mining setup. Photo by Qilai Shen via Bloomberg.

Five suspects have been caught allegedly stealing NT$76.83 million (approximately USD$2.4 million) worth of electricity to fund their bitcoin mining operations in Taichung, Taiwan’s second largest city.

The Taichung District Court said on Thursday that the case dates back to March, when the Criminal Investigation Bureau (CIB) identified two bitcoin mining farms in Shigang and Shalu districts in Taichung.

The investigation tied both of these facilities to a man with the last name of Huang. The police discovered that the mining operations were part of a larger operation, and expanded their investigation in cooperation with prosecutors. Eventually, the investigation uncovered that Huang had also built three other bitcoin farms in Taichung’s South, Central and Dali districts, and asked the court for permission to arrest Huang.

From July to September, the investigators continued their work and arrested four individuals, including an investor named Cheng, Cheng’s wife Su, another bitcoin mining farm builder named Huang, and an individual who rented the locations.

According to the police, they confiscated 700 mining machines in raids conducted from March to September. Prosecutors will request the court to seize the NT$4 million (USD$125.955) in profit that the operation made and require the five suspects to cover the cost of the electricity they stole.

One of the chosen mining sites, located above a language school with a bustling hotpot restaurant downstairs, presented severe fire risks due to wiring that had nearly melted from prolonged high temperatures and excessive power consumption. The staff at the language school had previously lodged complaints about hot floors with the landlord but were unaware of the cause.

Mining machines maintain a consistent electricity load, operating continuously to calculate algorithms. This produces a stable, nearly straight-line electricity consumption pattern, unlike regular users who usually display fluctuating power usage throughout the day.  If the wiring isn’t properly maintained it can cause a fire risk.

To identify potential electricity theft linked to crypto mining, electric data acquisition systems gather, process and monitor power user information in real-time. These systems analyze the unique power consumption characteristics of Bitcoin mining, allowing the identification and targeting of suspicious or abnormal energy usage patterns for investigation.

Read more: Binance client executives robbed of USD$12.5 million while on a business trip to Montenegro

Read more: Marathon Digital Holdings launches Bitcoin mining operation using renewable energy

Taiwan takes a liberal attitude to cryptocurrency

Taiwan has adopted a position common to that of most western nations.

For example, cryptocurrencies that are not linked or tied to the currency of any nation like USDT or USDC are currently not accepted by the Central Bank of the Republic of China (Taiwan) as currency.

Yet up to this point, no Taiwanese laws or regulations have been issued or modified to oversee the mining of Bitcoin or any other forms of cryptocurrency. Mining activities are generally allowed.

In July of last year, Taiwan’s Financial Supervisory Commission prohibited citizens from buying crypto in the Taiwan market using credit cards, joining online gambling, stocks, futures, options, and other relevant transactions where credit card services have been prohibited.

Other than the above, no laws, regulations or rulings have been officially issued to deal with the rise of cryptocurrencies. The only exception is for tokens the government has designated as securities, which are commonly called security tokens.

The investigation highlights the challenges associated with regulating cryptocurrency-related activities in Taiwan, as the country maintains a relatively open stance towards cryptocurrencies. Despite growing interest in cryptocurrencies, Taiwan has yet to establish comprehensive legislation governing their mining and trading, signalling the need for clearer regulatory frameworks in this rapidly evolving digital landscape.

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