UK-News

Police discover giant cryptocurrency ‘mine’ during West Midlands drug raid

A cryptocurrency ‘mine’ stealing thousands of pounds worth of electricity from the National Grid has been raided by police.   

Officers forced entry to the premises in an industrial estate in Sandwell, the West Midlands, on May 18 after tip-offs suggested it was being used as a cannabis farm.

Police heard how lots of people were visiting the unit at different times of day and lots of wiring and ventilation ducts were visible, before a drone picked up a heat source from above. 

They are all classic cannabis factory signs – but when officers gained entry they found a huge bank of around 100 computer units, which were understood to be a Bitcoin mining operation. 

The IT equipment was seized and enquiries with provider Western Power revealed the main electricity supply had been bypassed and thousands of pounds worth had been stolen.

Bitcoin and other cryptocurrencies are created or ‘mined’ by high-powered computers which continuously solve complex mathematical puzzles in an energy-intensive process that often relies on fossil fuels, particularly coal. 

One of the selling points of Bitcoin is that it can be used anonymously – meaning the unregulated currency is popular with criminals who have used it to buy drugs and guns.  

A cryptocurrency ‘mine’ stealing thousands of pounds worth of electricity from the National Grid has been raided by police

Officers forced entry to the premises in an industrial estate in Sandwell, the West Midlands, on May 18 after tip-offs suggested it was being used as a cannabis farm

Officers forced entry to the premises in an industrial estate in Sandwell, the West Midlands, on May 18 after tip-offs suggested it was being used as a cannabis farm

West Midlands Police’s Sergeant Jennifer Griffin said after the raid at Great Bridge Industrial Estate: ‘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. 

WHAT IS BITCOIN AND HOW DOES IT WORK? 

What are Bitcoins?

Bitcoin is a cryptocurrency – an online type of money which is created using computer code.

It was invented in 2009 by someone calling themselves Satoshi Nakamoto – a mysterious computer coder who has never been found or identified themselves.

Bitcoins are created without using middlemen – which means no banks take a fee when they are exchanged.

They are stored in what are called virtual wallets known as blockchains which keep track of your money.

One of the selling points is that it can be used to buy things anonymously.

However, this has left the currency open to criticism and calls for tighter regulation as terrorists and criminals have used to it traffic drugs and guns.

How are they created?

Bitcoins are created through a process known as ‘mining’ which involves computers solving difficult maths problems with a 64-digit solution.

Every time a new maths problem is solved a fresh Bitcoin is produced.

Some people create powerful computers for the sole purpose of creating Bitcoins, which can require a huge amount of energy to run.

But the number which can be produced are limited – meaning the currency should maintain a certain level of value.

Why are they popular?

Some people value Bitcoin because it is a form of currency which cuts out banking middlemen and the Government – a form of peer to peer currency exchange.

And all transactions are recorded publicly so it is very hard to counterfeit.

Its value surged in 2017 – beating the ‘tulip mania’ of the 17th Century and the dot com boom of the early 2000s to be the biggest bubble in history.

But the bubble appeared to have burst, and questions arose over what market there is for it long-term.

However, it has since boomed again, and in March 2021, surpassed the $60,000 mark for the fist time. 

‘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.’ 

The warrant was one of almost 50 executed as part of the force’s County Lines Intensification Week earlier this month.

The force said the crackdown led to 84 arrests, significant drug seizures and the recovery of weapons including a sawn-off shotgun and a blank firing pistol which had been converted to discharge live rounds.

The cryptocurrency mining raid comes after bank NatWest yesterday issued an alert to people to beware of scams involving the digital money.

The bank said it has prevented millions of pounds from being sent to ‘crypto-criminals’.

The frauds typically involve criminals posting adverts online carrying a bogus celebrity endorsement on a fake website with an article promoting cryptocurrency.

Investors are asked to complete a contact form and the criminal uses these details to follow up with a telephone call.

During the call the fraudster, posing as a cryptocurrency trader, helps the victim open a wallet with a cryptocurrency trading platform and in the process persuades the victim to install remote access software onto their computer.

Initially the victim transfers a small amount of money to the wallet, but over time they are persuaded to invest far larger sums. Remote access software is then used to empty the victim’s cryptocurrency wallet.

NatWest is offering customers free software to help with added online protection and recently introduced a manage my limits feature online which enables customers to restrict the amount of money that can be transferred out of their account.

Jason Costain, head of fraud prevention at NatWest, said: ‘We have prevented millions of pounds from being sent to crypto-criminals who are exploiting the high levels of interest in the currency. 

‘However, consumers should always be alert, especially to the use of fake websites and bogus celebrity endorsements.’ 

More than half of the world’s cryptocurrency supply is ‘mined’ in China.  

It is feared the power-hungry business could hinder China in meeting carbon-neutrality goals, according to some analysts.

The annual energy consumption of China’s bitcoin industry is expected to peak in 2024 at about 297 terawatt-hours, exceeding the total power consumption level of Italy and Saudi Arabia in 2016, according to a study recently published in scientific journal Nature Communications. 

In March, data showed how Bitcoin ‘mining’ firms are using more electricity than all the internet search giants combined.    

West Midlands Police's Sergeant Jennifer Griffin said after the raid at Great Bridge Industrial Estate (pictured): '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'

West Midlands Police’s Sergeant Jennifer Griffin said after the raid at Great Bridge Industrial Estate (pictured): ‘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’

It prompted Microsoft co-founder Bill Gates to highlight the negative impact mining Bitcoin has on the environment.

‘Bitcoin uses more electricity per transaction than any other method known to mankind,’ Gates said, speaking to the The New York Times

‘It’s not a great climate thing’, he added. 

The complexity of the mathematical puzzles solved by cryptocurrency computers means their processors require huge amounts of energy.   

Police discover giant cryptocurrency 'mine' during West Midlands drug raid

Pictured: A graph showing the value of Bitcoin throughout its lifespan. Bitcoin passed the $60,000 mark for the first time on Saturday, with analysts saying the giant US stimulus package helped boost the world’s most popular virtual currency on its record-breaking run

Pictured: A graph showing the amount of energy in terawatt hours (TWh) consumed by tech giants, electric vehicles and Bitcoin mining (lower, central and upper bounds). The bar second from right shows the current annual bitcoin consumption, that on March 3 was at a rate of 130.9 terawatt hours (TWh), roughly the same as New Zealand and Argentina

Pictured: A graph showing the amount of energy in terawatt hours (TWh) consumed by tech giants, electric vehicles and Bitcoin mining (lower, central and upper bounds). The bar second from right shows the current annual bitcoin consumption, that on March 3 was at a rate of 130.9 terawatt hours (TWh), roughly the same as New Zealand and Argentina 

Studies have shown that the annual carbon emissions from the electricity generated to mine and process the cryptocurrency is equal to the amount emitted by whole countries, including New Zealand and Argentina, with the upper-bound estimate being higher than that of even the UK.

Bitcoin mining’s energy consumption also eclipses that of the world’s major tech companies that provide entertainment services, including the streaming giant Netflix as well as Apple, Facebook, Microsoft and Google combined – all of which also require huge amounts of energy to run their services.

By comparison, Google – the largest energy consumer of the tech giants – used 10 TWh in 2019. 

On March 13, Bitcoin was using 130.9 TWh (annualised). The UK’s electricity consumption is slightly more than 300 TWh a year.  

Data from the Cambridge Bitcoin Electricity Consumption Index (CBECI) shows that the energy consumed by Bitcoin increased to its highest ever levels towards the end of last year, with the rates continuing to rise into 2021. 

Most Related Links :
newsbinding Governmental News Finance News

Source link

Back to top button