Illegal Crypto Mining Farm With Almost 5,000 Computers Busted in Ukraine

Last week, the Ukraine police unit exposed a massive underground crypto mining farm in the city of Vinnytsia, three hours from the capital city of Kyiv. The police have begun criminal proceedings against the operators of the farm, who hail from Kyiv and Vinnytsia, for unauthorized use of water, electricity, and thermal energy. 

The operations were located in the former warehouse of the JSC Vinnytsiaoblenerho, a Ukrainian company engaged in power transmission and distribution. During the raid,  the Security Service of Ukraine (SBU) seized 3,800 PlayStation gaming consoles, over 500 graphic cards, 50 processors, notebooks, phones, and flash drives used during the operations. 

As per the University of Cambridge's analysis, globally bitcoin mining consumes 121.36 terawatt-hours (TWh) of electricity every year. This is more than the electricity consumption of entire countries like Argentina or the Netherlands. Preliminary estimates suggest that the Vinnytsia operation was drawing power in the range of 5-7 million Ukrainian hryvnia (US$ 186,000 - 259,300) per month. 

To hide this consumption from the authorities, they were using electricity meters that did not show the real consumption. The investigators are now searching whether officials from JSC Vinnytsiaoblenerho were also involved in the operations. 

The recent bust comes closely after another illegal crypto farm was shut down in Chernihiv, in the northern part of Ukraine earlier this month. In June, a smaller operation was busted with electricity stolen worth $70,000 in two months. 

While cryptocurrency is not illegal in Ukraine, it is not a legal tender either. The Ukrainian government is pushing for Virtual Assets Law that will allow Ukrainian citizens to own and transact with cryptocurrencies. The country has over 100 companies involved in this sector and plans to make itself a global destination for cryptocurrencies, mining them with nuclear power, Foreign Policy reported.

The Virtual Assets Law is still a draft though it adds Ukraine to the list of countries like El Salvador and Paraguay who are betting big on cryptocurrencies amidst a crackdown by China.