Chinese Police Seize 200 Bitcoin, Ethereum Mining Rigs Over Electricity Theft

Chinese police have reportedly seized over 200 computers used to mine bitcoin and ethereum in a crypto-mining operation that allegedly stole electricity.

According to a report by China’s state-owned press agency Xinhua, police in the Anhui Province of eastern China confiscated the equipment after being alerted to abnormally high electricity usage by the local power grid’s operator.

The suspect, identified by his surname Ma, has been alleged to have stolen 150,000 kW hours of electricity in a little over the month, according to the report. An investigation by the Hanshan County police discovered that the electricity meter connected to the crypto mining operation had been short-circuited to avoid the power bill.

Cryptocurrency mining is an energy-intensive process wherein miners are rewarded with newly mined coins for creating blocks of validated transactions and adding them to the blockchain. Profits are earned when the value of the mined coins exceed the electricity and computing power costs.

The accused crypto miner was quoted as telling police that he bought the mining equipment in April before discovering that the daily power costs for running the operation – over 6,000 yuan ($923). The police claim Ma had not made any profits when he was caught tampering with the meter and siphoning electricity.

In a similar case, police in the city of Tianjin in northeastern China confiscated 600 bitcoin mining computers in April after the local power company noticed sudden spikes in electricity usage. Over 6 individuals are alleged to be involved in the bitcoin mining operation wherein the mains of a local junction box had also been tampered with, allegedly.

Despite largely shuttering the domestic cryptocurrency industry in what was once the world’s largest cryptocurrency market, China is still home to a majority of the bitcoin mining hashrate due to cheap labor and electricity, relatively speaking.

Beijing has since discouraged local governments from supporting domestic crypto mining operations as a part of the government’s wider crackdown. The scrutiny has led to a marked exodus of cryptocurrency miners with the likes of mining giant Bitmain looking at establishing operations in Switzerland and the power-abundant state of Washington in the United States.