A Ukrainian Tailor’s Shop Serving As A Front For An Illicit Crypto-mining Operation

December

7

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A front for an unauthorised crypto mining operation has been found to be a tailor shop in Kovel, Ukraine. The group’s leaders hooked their equipment to the local power system and stole electricity to fuel their activities.

The event happened in Kovel, a city in northwest Ukraine’s Volyn Oblast. According to the news source Kovel Media, authorities uncovered “an unauthorised connection to a transformer” during a shop check in December last year. The operators of the crypto farms were able to “use unmetered power” thanks to this link.

The shop’s proprietor, Alla Dieneka, was mandated by a local court to pay Volenoblenergo, the city’s power supplier, approximately $11,500 in damages. Additionally, she was instructed to pay court fees of $198.

According to the Ukrainian authorities, the mining activity may have seriously disrupted the electricity supply to nearby residential districts and necessary infrastructural facilities.

Agents of the Security Service of Ukraine carried out searches and confiscated laptops, specialised equipment, and other proof of criminal conduct.

The alleged leaders of the unlawful crypto-mining operation will be informed as part of the continuing pre-trial inquiry. The case will then be examined in court.

How Did Unauthorized Crypto Miners Get Around Their Meter?

The court heard that the shop’s employees gained access to the “voltage circuits” on a Volenoblenergo transformer by “dismantling the plexiglass cover” of the device and disconnecting several cables.

The shop’s own meter was subsequently circumvented by connecting the store’s electrical systems to the grid. Thus, they could access the local network’s power supply directly.

With “parts” of the business outfitted with “internet-connected computer equipment” and “other technical equipment” that “turned power into bitcoin,” the court was told that a group of 51 persons might have been involved in the crime.

Dieneka allegedly entered a guilty plea to the charges, and while she is entitled to appeal the decision, it is unlikely that she would do so.

The Ukrainian government has advocated for cryptocurrencies and worked to provide a progressive regulatory framework for the industry.

As part of its military conflict with Russia, it has also tried to raise money through cryptocurrency. Although crypto mining is permitted in the country, authorities have tried to take action against individuals who use stolen funds to fuel their rigs from public power networks.

According to the bank of Russia’s proposal, miners that want to sell their self-mined crypto within Russia must carry out operations through an “authorised organisation”.¬†

The Russian central bank has uncovered a new plan to only permit mining through “authorised organisations,” according to Alexey Moiseev, deputy finance minister, who announced on December 6.

The official claimed that such a policy would effectively result in the “complete licensing” of cryptocurrency mining. Additionally, Moiseev said that he is against that measure.

The central National Bank of Ukraine unveiled a draft design for a digital UAH last month, intending to use it in future non-cash retail transactions.

 

About the author, Awais Rasheed

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