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Chinese Authorities Crackdown on Bitcoin Miners Stealing Electricity from Oil Plants

Last Updated March 4, 2021 4:53 PM
Justin OConnell
Last Updated March 4, 2021 4:53 PM

According to Chinese reports, Daqing City in the People’s Republic of China recently cracked down on a ring of Bitcoin miners who were stealing electricity from the city’s oil production plants. Police there reportedly raided Bitcoin mining operations and confiscated equipment.

The Chinese bitcoin community is quiet about such occurrences, but based on reports seen, twelve operations were raided and more than 1,000 pieces of bitcoin mining equipment seized over an eight-month period over the course of 2016.

The miners are accused of stealing electricity, and pictures reportedly show local authorities counting mining equipment, according to an article by Shen Yanru, which appeared across various Chinese-language media outlets in November and found its way onto Bitcoin forums, such as BitcoinTalk, where the legitimacy of the article was generally unquestioned.

Daqing City is the Oil Capital of China. At the oil production plant in South West District, inspectors were recently conducting a detailed inspection when they heard from a back room an unfamiliar ‘buzzing’ sound.

Inspectors found inside a row of iron shelves, upon which were placed computer equipment and ‘bitcoin machines,’” according to Daqing Daily.

Inspectors reported the findings to local police. Machines were seized and the case is under investigation. Mr. Yanru writes that cases of miners stealing electricity for Bitcoin mining operations are not new to the oil production city.

On April 29, 2016, Yushulin Oilfield Power Management Branch discovered abnormal power consumption in two wells and reported it to local police. A house was discovered within 300 meters where 130 bitcoin machines were seized, presumably illegally siphoning the electricity from the production plant for bitcoin mining.

The Oilfield Security Department then cracked down on electricity being stolen from oil fields resulting in 1,200 units of bitcoin miners from twelve locales having been seized.

Daqing has experienced an oil boom since 1959. According to the 2010 census data, the population of the prefecture is about 3,000,000.

The region now known as Daqing Prefecture grew slightly when Czarist Russia built the Chinese Eastern Railway in 1898. In 1959, oil was discovered during large-scale oil exploration across the Northeast China Plain. Drilling began in 1958 and the town was founded to house oil workers.

Daqing plays an important historical role in industry in China, as Mao Zedong gave his Supreme Directive, “In industry, learn from Daqing” in the 1960s.

In other words, creatively procure electricity to enrich oneself with crypto?

Images from DQdaily and Shutterstock.