‘Black’ reward miners steal $6.6M in power from Russia’s energy providers

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Illegal block reward mining operations in Russia have reportedly stolen more than $6.6 million worth of electricity from local energy producers. According to Russian power company Rosseti, there have been 35 cases of illegal power consumption across 20 of Russia’s 85 regions since 2017.

“Surely it is not a secret for anyone who is interested in modern technologies that the main costs of cryptocurrency mining, in addition to the equipment itself, are the cost of electricity. The mining process is extremely energy intensive,” said Rosseti in the announcement they made via their Telegram group. “Since 2017, we have been recording attempts by unscrupulous merchants to reduce their costs and increase profits by stealing electricity for mining cryptocurrencies. We call such entrepreneurs ‘black miners.’”

There so-called “black miners,” according to Rosseti, takes a power cord from their closest power lines and then build their own power transformer—a device that transfers electrical energy from one electrical circuit to another. The “black miners” then try to conceal their illegal operation by hiding their power transformer and manipulating power meters to make it look like they are consuming less electricity than they actually are. 

“We closely analyze the consumption patterns looking for anomalies, inspect the power lines and measure the workload of the stations. Sometimes it’s easy to notice a mining farm by visual signs, like when a building has powerful air conditioning devices and fans installed,” Rosseti said.

A block reward mining farm consumes large amounts of electricity, so much that it’s almost obvious to tell who is processing digital currency when you look at the power grid and workloads. Because transaction processing operations are so power-intensive, they are often located in well-ventilated areas, to keep the hardware cool and aerated as they burn large amounts of electricity. Both the amount of power consumption and the visual signs can signal that block reward mining is taking place.

Rosseti says that they transfer all materials they discover related to illegal block reward mining to law enforcement officials.

Instances of block reward mining taking place with stolen electricity in Russia have been featured in the press in the past. In December 2019, two Russian citizens were found guilty of processing digital currency on government computers, and a few months before that, a Russian nuclear scientist was found guilty of using his work computer to process digital currency.