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Chinese, South Korean And U.S. Authorities Crack Down On Illegal Cryptocurrency Mining

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Chinese, South Korean And U.S. Authorities

Cases of illegal cryptocurrency mining operations are rising and South Korean, Chinese and U.S. authorities are in hot pursuit.

Last month, South Korean authorities arrested cryptocurrency miners for taking advantage of cheap electricity to run their crypto mining facilities. Some of the mining operations in the country are set up in factories and chicken farms within restricted areas. The government has been offering electricity at lower rates in those specific regions. Their goal was providing aid to struggling farms while also encouraging development.

Cryptocurrency miners have been setting up secret mining facilities in those areas so that they can bring down their running costs. South Korean police busted a crypto mining center and arrested its operators in Nam Yang city in the country’s Gyeong-ki province on April 19th. They arrested five individuals and discovered they had rented out chicken farms and factories. The arrested party wanted access to cheaper electricity rates.

The five individuals currently in police custody had been disguising their operations as semiconductor factories. According to police reports, they mined a variety of cryptocurrencies including Ethereum (ETH) and Bitcoin (BTC). They reportedly had more than 1580 ASIC miners installed in the area. The operation managed to generate more than $300,000 in just a few months, although the actual figure is unknown.

Meanwhile, authorities in the U.S have instituted their first ban on illegal cryptocurrency mining. Locals of Plattsburg, a small lake town, filed complaints about excessive electricity consumption by a crypto mining facility. Local authorities issued a cease and desist order on March 18th requiring the crypto mining facility to halt its operations. The authorities reported that the city would charge more than $1,000 per day if those running the mining operation decided to use low-cost electricity to run their rigs.

Authorities in China have also expressed concerns about excessive power consumption by cryptocurrency mining facilities. However, cryptocurrency mining is not illegal in most countries. For example, Chinese crypto mining giant, Bitmain, has a license to set up its operations in the U.S. Though, such deals have to account for the purchase of a specified amount of electricity. Illegal mining operations have been heavily opposed by governments because they put a strain on the electricity production in the areas where they operate.

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