Ukrainian police have seized 5,000 mining rigs, among them 3,800 PlayStation 4 (PS4) consoles from an alleged illegal digital currency block reward mining operation. According to local authorities, the operation used over $250,000 in stolen electricity monthly.
Ukraine’s counterintelligence unit, the Secret Service of Ukraine (SBU) announced the raid and seizure in an alleged illegal block reward mining site recently, describing it as the “the largest underground crypto farm.”
The operation was in Vinnytsia, a city in central Ukraine. According to the SBU, the miners used electricity meters that were rigged and did not show the real energy consumption, stealing between $186,000 and $259,300 in electricity per month. The heavy electricity usage often led to power surges and left the city in a blackout on several occasions.
In its raid, the SBU seized 3,800 PS4 consoles, 50 processors, over 500 graphic cards, flash drives, phones and other items. “Currently, investigative actions are underway to identify all the people involved in illegal activities,” the SBU stated.
At this point, the agency has not ruled out the possibility that it was an inside job achieved through collusion with officials in JSC Vinnytsiaoblenergo, an energy distribution company. For one, the warehouse that was used for the mining is adjacent to facilities owned by the company.
However, the energy company has denied involvement. In a statement, the company stated, “The equipment used for cryptocurrency mining has never operated on premises owned by our enterprise.”
The energy company also disputed the claimed energy theft by the miners, saying it did not find any evidence of electric theft and concluded that the authorities’ information “does not correspond to reality.”
Experts have questioned the use of PS4 consoles, especially in regards to their efficiency. According to Techspot, the consoles were of the PS4 Slim variety. And while it’s more efficient than its predecessor, it’s still a poor alternative to the specialized ASIC miners. However, given that the miners were stealing the power, it’s likely that efficiency wasn’t their biggest priority.
While not condoning the theft of electricity, one Ukrainian blockchain expert has pointed a finger at the SBU for allegedly targeting miners, even the legal ones. Speaking to Kyiv Post, the CEO of Blockchain Ukraine Nataliya Drik said that the agency often abuses its power to seize mining equipment worth thousands of dollars without any legal justification. With no legal framework for miners, or digital currencies for that matter, miners have to “work in shadow or move abroad to avoid raids.”
Illegal digital currency block reward mining is not uncommon in Ukraine. As CoinGeek reported, one staffer at the country’s Justice Administration was busted mining at work. Similar cases have occurred at the national rail administration and at the South Ukraine Nuclear Power Plant.