Chinese Bitcoin (BTC) Miner Nabs Electricity, Authorities Crack Down 10

Chinese Bitcoin (BTC) Miner Nabs Electricity, Authorities Crack Down

Man Steals $15,000 Of Electricity For Bitcoin (BTC) Mining

Despite the stringent rules placed on China’s crypto scene, the Bitcoin and altcoin mining business remains as hot as ever. So hot, in fact, that a Chinese man, named Xu Xinghu, thought it would be a good idea to steal electricity from the nation’s train network to bolster his mining activities.

According to local media outlet CNBeta, with TechNode relaying and translating the information, Datong native Xu Xinghu, who hails from a city in China’s Shanxi province, stole approximately 104,000 RMB ($15,000) worth of electricity during the peak of 2017’s bull run (November to December). The mischievous, yet ingenious and inventive Bitcoin (BTC) miner reportedly siphoned electricity from the train network’s power lines to run 50 ASIC machines, along with three colossal cooling fans that were situated in his makeshift mining facility.

It isn’t clear exactly how he was found out, but he recently pleaded guilty to stealing resources, and was subsequently sentenced to three and a half years in prison, with Xinghu reportedly having to pay a 100,000 RMB fine as well. Although what he did was clearly illegal, there were some that claimed that the sentence was a bit harsh, as he was still required to pay a fine and his wrongdoing wasn’t exactly a violent crime, to be frank. But, while cryptocurrency mining isn’t illegal in China, it is likely that authorities are aiming to send a message at miners acting in ill faith and malintent.

As of April of 2018, Xinghu had reportedly amassed 3.2 BTC, worth approximately $19,000 at the time of writing. Although his mining venture’s bill wasn’t solely footed by the Chinese government, Xinghu’s ASICs were still confiscated and seized following his sentencing, which took place last month.

As per Technode, this isn’t the first time that Chinese citizens have been caught siphoning electricity from institutions and governmental infrastructure. In 2016, a northern China-based BTC mining group was caught for stealing electricity from oil refineries, resulting in a similar sentencing. Even earlier this year, a family was found to be stealing electricity from the nation’s power grid to power their Bitcoin machines.

But, as recently found by Diar researchers, Bitcoin profitability is quickly dwindling, especially for retail mining operations. Keeping this in mind, cases of illicit mining may begin to shrink in number as profitability drys up, even though the thieves aren’t the one footing the bill.

Crypto Is Still Taboo In China

Despite China’s vast number of cryptocurrency innovators, the country still seems averse to accepting this new asset class with open arms.  Some of the Chinese government’s measures to curb crypto include banning 124 foreign crypto exchanges, restricting access to eight crypto-centric news outlets on WeChat, and also banning Alipay accounts that have been suspected of facilitating crypto trades.

Most recently, China’s central bank, known as the People’s Bank Of China (PBOC), issued a public notice bashing initial coin offerings (ICO) and the risks that investors may be subject to. The governmentally backed body wrote:

[ICOs are] suspected of illegally selling tokens, illegally issuing securities, illegal criminal activities, financial fraud, pyramid schemes and other illegal and criminal activities.

Although some of these claims are true in some fringe cases, it is clear that the PBOC may have ulterior motives when it comes to issuing such an announcement, as it has become apparent that China isn’t willing to let crypto assets advance any further.

Photo by Alexandre Debiève on Unsplash