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Bitcoin Mining Farm – A psychiatric clinic – Discovered in the oldest prison in Moscow

Bitcoin Mining Farm – A psychiatric clinic – Discovered in the oldest prison in Moscow

Police have discovered a psychiatric clinic in Russia’s oldest prison that has been secretly turned into a bitcoin mining farm.

A deputy director and his accomplices are being investigated for their alleged role in the construction of the crypto farm after being accused of stealing electricity to produce digital currencies.

Butyrskaya prison in the Tverskoy district of central Moscow is one of the oldest prisons in Russia, dating back to the 17th century. The prison is said to have been built around 1771.

Underground Bitcoin mining operation

Investigators discovered that the caretaker and his accomplices had installed the mining equipment in November of last year. Throughout January and February of this year, mining rigs mined cryptocurrencies.

A data center at Russian bitcoin miner Bitriver (Alexander RyuminTASS via Getty Images)

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During that time, the team used almost 8,400 kilowatts of electricity paid for by the government at a total cost of more than 62,000 rubles (nearly $1,000).

Therefore, the prison officer is accused of having “manifestly exceeded his authority and, therefore, seriously injured the legally protected interests of society or the State.”

A week earlier, agents from the Russian Federation and the Russian Republic of Dagestan discovered a huge cryptocurrency mining facility in Makhachkala, the capital of the republic.

Crypto Miners Lured To ‘Bitcoin Friendly’ Russia

According to the Tass news agency, authorities seized 1,476 pieces of equipment used to mine bitcoins and other cryptocurrencies.

Cryptocurrency miners are attracted to Russia due to its subsidies and rare cases of power theft. Regions like Irkutsk Oblast and Krasnoyarsk Krai, which have benefited from historically low electricity rates for residents and government agencies, have become hubs of criminal activity.

The clandestine miners were mainly criticized for the frequent power outages. Cases have been most common in residential areas, where increased energy consumption has led to power outages.

Total BTC Market Cap at $580 Billion on Daily Chart | Source: TradingView.com

According to the Cambridge Center for Alternative Finance, as of August 2021, Russia accounted for around 11% of the global processing power used to mine new bitcoins, making it the second largest mining hub after Kazakhstan.

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Meanwhile, the International Monetary Fund has indicated that without access to major foreign currency, Russia may turn to bitcoin mining to produce foreign currency from its excess energy exports.

The United States has imposed a blockade on Russian energy imports and Europe is under increasing pressure to impose its own oil embargo.

Russia is a major player in the oil, gas and coal markets, but many traders have shied away from its energy exports in response to sanctions.

Over time, sanctioned countries could devote more resources to circumventing sanctions through bitcoin mining, the IMF says, echoing the concerns of some analysts.

AFP/Dimitar DILKOFF Featured Image, Chart from TradingView.com

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