Cops find giant Bitcoin ‘mine’ stealing thousands of pounds of electricity during warehouse drug raid
COPS were stunned to find a Bitcoin "mine" stealing thousands of pounds of electricity during a suspected warehouse drug raid.
Officers in the West Midlands thought they were about to bust a cannabis farm - but were met with the advanced tech scam instead.
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Cryptocurrencies have to be "mined" in order to be created, which involves solving increasingly complex mathematical puzzles - requiring more and more powerful computers and significantly more energy.
Most computers used for the process cost more to run than the value of the currency they create - making stolen electricity a lucrative business when a single Bitcoin is currently worth around £26,000.
In this case suspicions had been raised over the huge volume of power being used, leading cops to initially think it was being used for drug production.
Police heard lots of people were visiting the unit throughout the day, with lots of wiring and ventilation ducts visible while locals say three men were behind the operation.
It comes as:
- We could have been Bitcoin millionaires – if we hadn’t fallen for an Elon Musk scam or binned the wrong hard drive
- What is Bitcoin and why is the price falling?
- Tech writer blows Bitcoin worth £300,000 on sushi – and crypto fortune is now the restaurant owner’s retirement fund
- Bitcoin trader Laszlo Hanyecz who spent crypto currency now worth £306MILLION on two pizzas says ‘I have no regrets’
Cops forced their way into the premises in Great Bridge Industrial Estate in Sandwell on May 18, after a drone picked up a heat source - but didn't find what they were expecting.
Inside, police discovered 100 powerful computers hooked up to a complex system.
West Midlands Police say the computers were illegally using thousands of pounds of electricity in order to mine Bitcoin on a huge scale.
Crooks have discovered Bitcoin can be used anonymously, meaning the unregulated currency is popular with criminals buying drugs and guns.
The mass of IT equipment was seized, and a probe revealed the electric supply had been bypassed to power the "mine".
It's certainly not what we were expecting.
Sergeant Jennifer Griffin
It had all the hallmarks of a cannabis cultivation set-up and I believe it's only the second such crypto mine we've encountered in the West Midlands
The owner of a unit nearby : "The police turned up last week at some point and they were here from 11pm at night till the end of the next day as everyone was wondering what was going on.
'They didn't say much to any of us owners but I know some of the men from that side of the estate did have a look inside the unit and they couldn't believe how decked out it was.
"I spoke to my partner about Bitcoin and he explained but you never would have thought that.
"I mean drugs yes, that would make sense and be pretty normal, but Bitcoin I never would have guessed.
"We used to see three guys, they'd been coming for around eight months on and off."
One expert estimated the people behind the scam would have been stealing around £16,000 worth of electricity a month, about £11,000 more than they would have made from the Bitcoin generated in the same time period.
What is Bitcoin and how do you mine it?
BITCOIN got you baffled? Here's what you need to know:
- Bitcoin is a virtual currency
- It's traded between people without the help of a bank
- Every transaction is recorded in a public ledger, or "blockchain"
- Bitcoin is created by mining
- Mining involves solving difficult maths problems using computer processors
- Bitcoin can be traded anonymously, which can make it a popular way of funding illegal activities
- The value of Bitcoin fluctuates wildly
- Bitcoin is one of many different cryptocurrencies, but by far the most popular
Bitcoin mining is the process by which new Bitcoins are entered into circulation.
It is done by using very sophisticated computers that solve complex maths problems. It is costly and not often rewarding.
Once the equation is solved, transactions can be audited, with miners who get through verification process rewarded with Bitcoin.
Mining isn't illegal but it is risky, and using electricity from a mains supply to power it is against the law.
Sergeant Jennifer Griffin said: "It's certainly not what we were expecting.
"It had all the hallmarks of a cannabis cultivation set-up and I believe it's only the second such crypto mine we've encountered in the West Midlands.
"My understanding is that mining for cryptocurrency is not itself illegal but clearly abstracting electricity from the mains supply to power it is.
"We've seized the equipment and will be looking into permanently seizing it under the Proceeds of Crime Act.
"No one was at the unit at the time of the warrant and no arrests have been made - but we'll be making enquiries with the unit's owner.
"We heard how lots of people were visiting the unit at different times of day, lots of wiring and ventilation ducts were visible, and a police drone picked up a considerable heat source from above.";
It comes after we told how a tech writer revealed how she blew Bitcoin now worth almost £300,000 on a sushi dinner for strangers.
Kashmir Hill revealed she spent 10 of the crypto coins at a restaurant in San Francisco while doing a piece for in 2013.
And some seven years later she revealed restaurant owner Yung Chen still has hold of much of her Bitcoin, using the fortune in part to retire.
The Sun Online has been looking at some cautionary tales from the world of crypto as the highly volatile market continues to fluctuate.
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Kashmir's story comes after we we told the tale of "Bitcoin Pizza Guy", who spent £250million of Bitcoin on Papa John's.
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We also recounted the story of a crypto trader who lost £200million worth of the coins as he forgot his password, and a woman who found she spent £500,000 of Bitcoin on weed and MDMA.
Meanwhile, one furious Redditor declared Bitcoin had ruined his life as he found his £300million fortune was lost after his mum threw out his broken laptop.
5 risks of crypto investments
THE Financial Conduct Authority (FCA) has warned people about the risks of investing in cryptocurrencies.
- Consumer protection: Some investments advertising high returns based on cryptoassets may not be subject to regulation beyond anti-money laundering requirements.
- Price volatility: Significant price volatility in cryptoassets, combined with the inherent difficulties of valuing cryptoassets reliably, places consumers at a high risk of losses.
- Product complexity: The complexity of some products and services relating to cryptoassets can make it hard for consumers to understand the risks. There is no guarantee that cryptoassets can be converted back into cash. Converting a cryptoasset back to cash depends on demand and supply existing in the market.
- Charges and fees: Consumers should consider the impact of fees and charges on their investment which may be more than those for regulated investment products.
- Marketing materials: Firms may overstate the returns of products or understate the risks involved.
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