South Korean Police Nab 14 for Illegally Mining Crypto With Cheap Power

South Korean authorities arrested 14 persons representing 13 different companies for illegally engaging in cryptocurrency mining using cheap electricity in the country’s industrial complexes, the country’s Yonhap news agency reported.

The companies allegedly carried out the illegal mining activities across four different complexes in the country’s southwestern city of Gwangju. According to an announcement made by the Gwangju Metropolitan Police Agency on Sunday, six companies were located in the Hanam Industrial Complex, three companies in each of the Nano and Pyeongdong Industrial Complexes, while there was only one company operating in Jingok Industrial Complex.

According to Gwangju authorities, all these companies stand accused of having violated the rules of factory usage.

Each of the companies reportedly installed 100-350 mining devices and were engaged in cryptocurrency mining since May 2017.

Desperate times, desperate measures

South Korea is one of the most expensive countries to mine Bitcoin due to its high electricity costs. The country even topped the list of most expensive countries among 114 countries for mining Bitcoin in a report published by New Jersey-based electric supply company Elite Fixtures.

Based on the current value of Bitcoin, it is very difficult to make a profit with mining Bitcoin in the peninsular country.

However, the mining companies were receiving electricity at 10 percent cheaper rates by setting up their mining rigs in these industrial complexes as compared to other industrial areas. Moreover, rents of properties in these complexes are much cheaper.

Due to the massive expense associated with crypto mining in South Korea, miners often engage in procuring electricity from subsidized sources, which is strictly prohibited. In August last year, Seoul-based electronics shopping mall Yongsam Market barred vendors from mining any cryptocurrencies citing the surge in the utility bills and also fire safety reasons due to the extensive emission of heat from the mining rigs.