Tech 16 October 2018

Dennis Wafula

Crypto-mining church in Russia fined for excessive energy use

A Protestant church from the city of Irkutsk in Russia has been court-ordered to pay a fine of 1.1 million rubles ($16,600) after it was discovered to have been consuming large amounts of electricity for its cryptocurrency mining operations.

According to Russian news outlet RT, local utility company Irkutskenergo reported a sudden spike in the electricity consumption of the ‘Grace’ evangelical community in May 2017, reaching 2 million kWh through August. Church trustees told the utility provider that the energy was used for heating as well as to power the printing machine to copy religious materials. Inspectors from Irkutskenergo visited the building rented out to the church, and in it, they discovered a server room on the second floor, which they determined was being used to mine cryptocurrencies.

This resulted in the utility company to charge the church the same rates applicable to corporations and industrial enterprises due to ‘Grace’s’ “excessive power consumption.”

The organization, however, took the matter to court, asking for a refund of the surcharge totalling 1.1 million rubles. However, the Irkutsk Arbitration Court turned down the church’s request and instead, ordered ‘Grace’ to pay up.

In its ruling, the court noted that the energy spike happened during the summer season, and also compared the energy used ‘Grace’ with data from larger temples and printing houses in Russia. Ultimately, the judge ruled that the amount the church paid to the authorities was reasonable.

The eastern parts of Europe have seen significant numbers of home crypto mining in the last few years. This is because the region enjoys preferentially subsidized electricity rates. According to local reports, private residents and other categories of consumers pay 1.22 rubles per kWh ($0.018) during the day and 0.70 rubles ($0.010) at night, so it’s no surprise that enterprising individuals and organizations like ‘Grace’ may have been taking advantage of the cheap electrify to earn extra income.

The recent court ruling, however, could change how authorities in Russia and the surrounding areas will be handle home-based crypto mining activities. Similar to ‘Grace’s’ case, other utility companies could start charging home crypto miners the same electricity rates as those paid by industries and big organizations.

Countries with favorable electricity prices have had to take a stand to control crypto mining activities and electricity consumption. Many have taken action against miners for stealing electricity. Recently, a miner in China was charged with mining cryptocurrency using stolen electricity. The court sentenced him to three years and six months in prison for his actions.

Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.

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