14 arrested over alleged discount Bitcoin mining in South Korea
Authorities in South Korea have arrested 14 people in connection with legacy Bitcoin (BTC) mining. While mining itself is certainly not illegal, as it’s almost a necessary component of the cryptocurrency cycle, these individuals tried to take advantage of the system to reduce their expenses and gain inflated values, according to a Yonhap report.
The mining operations were able to set up their activities and pay 10% less than the going rate for electricity, as well as pay rent for factory space at prices lower than market rates. In total, 13 companies were involved, using 350 machines to mine BTC since May 2017. While it’s highly unlikely that any of those involved will see prison time, there is a very good chance that they will be forced to pay steep fines for their activity.
Looking for ways to reduce expenses and maximize profits is the backbone of any business. However, most will normally pursue legal avenues to reach their goals. Those that don’t almost invariably end up meeting their appropriate fate.
Large-scale mining operations have recently fallen out of grace with several jurisdictions due to their energy demands. In Plattsburgh, New York, for example, new mining operations are being refused, leaving only existing operations in place while the city reviews its cryptocurrency policy. Plattsburgh is unique in that it benefits from a hydroelectric dam close by that results in extremely low–$0.045 per kilowatt hour (kWh)—rates. However, when cryptocurrency mining operations were allowed in, they were given a greater discount, cutting their kWh rate in half.
Despite the reduction in price, the miners account for 10% of the overall energy usage in the city, a fact that hasn’t sit well with residents or lawmakers. The usage has caused residents’ overall electricity bills to increase by as much as $200. Plattsburgh Mayor Colin Read is currently researching options with the community to find a meeting point that will make both the residents and the miners happy. For their part, the miners reportedly are more than willing to pay for any overages incurred by the city.
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