Hardware Worth $1.9 Million Stolen in Russian Crypto-Mining Capital

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Russian law enforcement is investigating the alleged theft of mining equipment worth around $1.9 million. The powerful computer equipment has disappeared from a crypto-mining hotel in Irkutsk, the owners of which have been accused of large-scale fraud.

100 Russians lose mining machines worth 100 million rubles

Font in Russian Irkutsk Oblast have launched an investigation into operators of a mining accommodation facility suspected of defrauding customers and stealing their expensive coin-minting equipment, Tass news agency reported, citing senior management of the regional interior ministry.

In anticipation of quick wins, the miners handed over their devices to those running the mining hotel, law enforcement officials said. At some point, the latter stopped all payments to their customers and did not make the machines expensive.

“A criminal case was opened on the basis of these facts under part 4 of article 159 of the Criminal Code of the Russian Federation (large-scale fraud). Various material evidence, including computer equipment and documentation, was seized from their office,” a statement read.

Investigators were able to establish that between November 2021 and May 2022, the suspects lured people who wanted to set up their coinage equipment in a mining hotel. They were offered rental and electricity prices well below the actual market rates.

At the same time, they urged miners to turn in their equipment as soon as possible, citing limited rental space. The owners of the mining rigs were not informed of the location of their devices and only the representatives of the hosting service were given access to the mined coins.

The Russian police are now looking for the fraudsters. About 100 people suffered losses because of their actions. They gave the organizers of the mining hotel equipment with an estimated total value of 100 million rubles, or almost $1.9 million.

Offering some of the lowest electricity rates in the country, starting at just $0.01 per kWh in rural areas, the Irkutsk region has seen a spike in crypto mining, with farms often set up in basements and garages and supplied with subsidized domestic electricity.

Largely for this reason, the oblast has been dubbed the mining capital of Russia. Earlier this year, local electricity providers complained of an increase in electricity consumption in residential areas, blamed on home mining.

Russian media revealed that planes with second-hand mining equipment from China, which clamped down on the industry in May 2021, have continued to arrive in the region this year, while cases of theft of mining equipment increased. Russia is considering legalizing crypto mining which can benefit from its abundant energy resources and cool climate.

Keywords in this story

coin minting, Crypto, crypto miners, crypto mining, Cryptocurrency, Fraud, Irkutsk, Miners, mining, Mining devices, mining hosting, mining hotel, mining machines, mining rigs, Russia, Russian, Theft

Do you expect more fraud cases related to cryptocurrency mining in Russia in the future? Share your thoughts on the subject in the comments section below.

Lubomir Tassev

Lubomir Tassev is a tech-savvy Eastern European journalist who loves Hitchens’ quote: “Being a writer is who I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.

Image credits: Shutterstock, Pixabay, Wiki Commons

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