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Cryptocurrency miners in the US and South Korea disguised as protected businesses to mine bitcoin with unfairly cheap electricity rates.

In the US, China, and South Korea, many individual cryptocurrency miners and large-scale mining centers were cracked down for conducting illicit operations. For example, in April 2018, cryptocurrency miners in South Korea were arrested for illicitly utilizing cheap electricity to produce cryptos.

Chicken farm in South Korea

In South Korea, places such as chicken farms and factories in development restricted areas are provided with electricity at cheaper rates by the government to help struggling industries and support innovative technology-focused initiatives. The government is stricter with the usage of electricity in these areas and consistently monitors the inflow of energy into buildings, factories, farms, and houses near these specially approved districts.

On April 19, police in the Gyeong-ki province of South Korea, the second largest region behind Seoul, arrested operators of a mining center in Nam Yang city. An in-depth police investigation disclosed that five cryptocurrency miners, whose identities remain confidential as they are still in police custody, purposely rented out factories and chicken farms in the protected part of the city to receive electricity for substantially lower rates.

By disguising buildings as semi-conductor factories and several properties as chicken farms, the five individuals were able to mine cryptocurrencies like Bitcoin and Ethereum with virtually no cost apart from the ASIC miners they acquired and installed.

Image source: Northern Gyeonggi Provincial Police Agency via Hani

In the Paju restricted development area, the five individuals rented out a 859 square meter building and applied to the government as a semi-conductor factory. For 8 months, the group utilized the space to mine cryptocurrencies with more than 1580 ASIC miners. In the later months of their illegal venture, the group recruited more than 40 individuals and rented out their ASIC miners to produce even more cryptocurrencies.

The group generated more than $300,000 by accepting ASIC miners from individuals within months but the actual sum of

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