China police pull plug on bitcoin miners after US$3 million power tip-off

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An illicit bitcoin mining operation which stole nearly 20 million yuan (US$3 million worth of electricity has been shut down by police in eastern China.

Police in Zhenjiang, Jiangsu province, confiscated almost 4,000 mining devices and have taken “compulsory measures” against more than 20 criminal suspects after receiving a tip-off from a local power company which had reported abnormal electricity usage.

“In value, it is the largest case in the amount of electricity stolen that Jiangsu has cracked, and a rare sight in the whole country,” Zhenjiang police said in an online statement.

Bitcoin is a decentralised virtual currency which can be produced or “mined” by banks of computers solving complex algorithms. The mining process can be very expensive on a large scale because it requires cutting-edge technology and vast amounts of electricity.
Facebook’s Libra cryptocurrency – how will China react?
The value of bitcoin surged above US$11,000 after Facebook last month unveiled its own global cryptocurrency, called Libra, which will be launched next year.
Unlike a traditional currency such as the dollar, euro or yen, bitcoin has no central bank and is not backed by any government. Instead, the unit is controlled and regulated by its community of users, who argue that this makes it more efficient than traditional currencies.

Although China’s digital payments ecosystem has developed faster than most of the world, with mobile payments dominating everyday transactions throughout urban centres, the country’s central bank has adopted a cautious attitude towards cryptocurrencies.

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In 2017, Beijing cracked down on cryptocurrency trading by shutting down bitcoin exchanges. It also banned initial coin offerings as a way for companies to raise funds.

According to a study last year, cryptocurrency mining consumes more energy per year than many countries – with more than half of mining farms located in China.

Besides electricity theft, other bitcoin-related crimes include hacking of cryptocurrency owners.

In August, police in Xian, capital of northwest China’s Shaanxi province, arrested three suspects for allegedly stealing assets worth 600 million yuan by hacking the computers of people who owned bitcoin and other virtual currencies.


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