A man in Taiwan has been arrested over claims he mined millions of dollars’-worth of cryptos using stolen power.

According to a report from EBC Dongsen News on Wednesday, a man with the surname Yang is suspected of stealing electricity valued at over NT$100 million ($3.25 million) via his various business premises to mine bitcoin and ether, reaping around the same amount in mining profits.

Yang reportedly tapped the power supply at 17 stores in Taiwan for his illicit crypto mining operations. He would first rent an internet cafe or a toy store, then hire electricians to redesign the wiring so that the stolen electricity would not be metered, the report alleges.

Taiwan Power Company, the island’s state-owned utility provider, first discovered the operations after noticing an unstable power supply and launching an investigation. Yang was suspected and subsequently arrested by the police.

Wang Zhicheng, deputy head of the fourth brigade of Taiwan’s Criminal Investigation Bureau said in the article:

“The group recruited electricians who managed to break into the sealed meters in order to add in private lines to use electricity for free before that usage reaches the meters.”

Several such cases of mining using stolen power have emerged recently, as easy gains have proven too much of a temptation for some. Last month, two principals at a Chinese school got in hot water after stealing electricity from the institution to mine ether.

Back in June, police in the eastern Chinese province of Anhui arrested a man for allegedly stealing a significant amount of power for bitcoin and ether mining, after the local power grid company reported a spike in electricity use. And, in April, six individuals were arrested in China’s Tianjin region over claims they used 600 cryptocurrency miners to generate bitcoin with power taken from the local power grid.

The drastic decrease in crypto mining profitability has hit graphics processing unit (GPU) producers like Taiwan-based Nvidia hard. In Q4 2018, the firm experienced a massive sell-off of its shares, cutting the stock price by 54 percent and making it the worst performer in the S&P 500, CNBC reports on Dec. 21.

From 2016 to September 2018, Nvidia’s market value markedly increased from $14 billion to $175 billion as demand for its GPUs in artificial intelligence (AI) and cryptocurrency mining grew. In May, the firm reported its profits from crypto mining for the first time while forecasting a two-thirds drop in sales to miners for Q2.

Nvidia initially forecasted insignificant crypto mining-related sales in Q3, while the quarterly report in November revealed that GPU sales for blockchain-related applications had all but disappeared. Nvidia CEO Jensen Huang said that the company’s “near-term results reflect excess channel inventory post the cryptocurrency boom, which will be corrected.”

The disappearance of crypto-related sales has left the company with a “crypto hangover,” according to Huang. The cryptocurrency frenzy drove up prices for Nvidia’s GPUs, but once that demand disappeared, prices did not decrease quickly enough to attract customers who were waiting for more affordable cards.

In addition to the decrease in crypto mining sales, Nvidia’s data center segment failed to meet Wall Street expectations, even though revenue grew by 58 percent, per CNBC. Today, Nvidia stock is down 4.09 percent, closing at $129.57.

Chip stocks overall have performed poorly this year. The PHLX Semiconductor Index, which tracks major hardware producers like Nvidia and Advanced Micro Systems (AMD) is down 20.37 percent over the last three months. AMD’s share price is down 45.42 percent over the same period.

The post-mining boom hardware glut has seen a notable drop in prices. AMD’s popular Radeon RX580 graphics processing unit (GPU), which has been widely used by crypto miners, is now being sold for $180, down 67 percent from a peak average price around $550 in February 2018.

Decreased profitability in the current bear market has caused some miners to leave the business. Some mining firms in China have been selling off dated hardware that has reached its shutdown price by the kilogram in order to mitigate their losses. According to local reports, earnings from mining are no longer enough to cover electricity and other associated costs.

When it comes to bitcoin mining, Canada is a natural.

A temperate climate helps to keep mining equipment cool, and plentiful renewable energy from hydroelectric dams gives Canadian provinces like British Columbia a natural advantage with cheaper electricity costs.

B.C. is sitting on a large surplus of hydroelectric energy, as depleted resources have resulted in the closures of many pulp and paper mills and traditional mines. The power surplus is also a result of the success of alternative energy and energy conservation initiatives.

Consequently, the B.C. government’s energy arm, BC Hydro, is actively looking for new businesses, including bitcoin miners, to take up the slack and help revive stricken resource towns, and it has proposed a discounted energy rate as an incentive.

BC Hydro, a B.C. government Crown corporation, is a leader in green energy programs in Canada.

Scott Howard, CEO of Toronto-based Full Stack Capital, told Bitcoin Magazine that he is encouraged by the B.C. proposal and that the province is a leader in alternative and green energy programs.

“BC Hydro and B.C. in general set the pace for public sector innovation in Canada. This is good news both for energy conservation and for bitcoin mining’s environmental footprint.”

He added, “Bitcoin mining as a base load strengthens the power grid. Effective power generation and distribution requires a stable base load that digital mining can provide.”

BC Hydro’s business development manager, Dina Matterson, said at an energy conference recently that half of the new inquiries the Crown corporation is getting are from the crypto-mining industry, and it is estimated that the inquiries could drum up 5,000 megawatts in new energy demand.

Matterson said they will be submitting a proposal in early 2019 to the British Columbia Utilities Commission, which regulates BC Hydro, for a “load attraction rate,” an initial discount on electricity for new corporate customers, including cryptocurrency companies.

“This rate would help BC Hydro compete with clean jurisdictions that have lower power rates than us,” she told the conference participants. “We need to get in the game.”

The B.C. government hopes to connect the lumber, pulp and paper, and traditional mining companies, which have invested in generating substations and transmission lines, with new bitcoin mining startups that would rent these power utilities at reduced rates.

For example, bitcoin miners in Ocean Falls, B.C., are successfully using previously abandoned power-generating stations and transmission lines, and a new bitcoin mine is under development in Houston, B.C., a once-thriving lumber town.

To date, BC Hydro has provided bitcoin miners with six megawatts of power, although the utility believes there are many more crypto miners operating in the province.

B.C.’s attempt to lure cryptocurrency entrepreneurs to make use of its abandoned infrastructure and surplus power resonates with global trends that signal an uptick in cryptocurrency mining.

A recent report from the University of Cambridge Centre for Alternative Finance flagged the exponential increase in crypto-mining operations around the world in 2018.

China remains the top country to host mining farms, but the U.S. and Canada have witnessed a rapid growth of mining-farm openings over the past year, often associated with the availability of cheap hydroelectric power, says the report.

Ameer Rosic, CEO of Toronto-based Blockgeeks, is enthusiastic about the future of bitcoin mining, especially in the Canadian setting, telling Bitcoin Magazine:

“Since the beginning Canada has been at the forefront of Bitcoin. I think the timing couldn’t be better for Canada to attract more bitcoin miners. B.C. has very affordable electricity and the cost of ASICs has decreased tremendously. This is a golden opportunity to stimulate local economies and put Canada as a leading player in the bitcoin mining space.”

As stated in the court document, an unknown hacker, referred to as “John Doe” in the case, managed to take over Bitmain’s Binance account and used stored Bitcoin to manipulate the price of altcoin Decentraland (MANA) and then steal the profits.

Bitmain says in the court document that the amount of the company’s losses “exceeds” $5.5 million in “Bitcoin and other digital assets,” and specifying that the defendant was able to steal “approximately 617 BTC.” The document cites that the unauthorized action took place on April 22, when Bitcoin was trading at around $8,935.

The document also explains that as a part of the “scam,” the unknown hacker used two of their own accounts on now-second largest crypto exchange Binance, as well as on Bittrex, with around 2.3 million MANA already acquired on Bittrex. “John Doe” reportedly placed purchase orders from Bitmain’s digital wallet offering to buy MANA “and other digital assets” with Bitmain’s bitcoins at a price that was “far above the going market rate.” The defendant also allegedly further artificially inflated MANA’s price by using Bitmain’s BTC to buy Ethereum (ETH), which was then used to buy MANA.

According to the lawsuit, the hacker further carried out a number of orchestrated trades in the reverse direction between BTC and MANA from Bitmain’s wallet and their own, eventually reportedly completing the theft by transferring BTC from their Bitmain account “ultimately into a digital wallet on the Bittrex cryptocurrency trading platform.”

In Mid-October, Cointelegraph reported that losses caused by hacks of crypto exchanges in the first nine months of 2018 have exceeded the numbers for the whole year of 2017 by 250 percent, with $927 million stolen.

Google co-founder Sergey Brin and CEO Sundar Pichai have a lot more in common than just their jobs. Both tech billionaires have crypto-savvy young sons who mine ethereum.

Pichai said his 11-year-old son mines ethereum on a home computer that Pichai built himself, according to Business Insider. He made the amusing revelation at the New York Times DealBook conference this week while — ironically — discussing tech addiction and the importance of limiting screen time for children.

“Last week I was at dinner with my son, and I was talking about something about bitcoin and my son clarified what I was talking about was ethereum, which is slightly different,” Pichai recounted. “He’s 11 years old, and he told me he’s mining it.”

When asked if he built a server to help with his son’s crypto mining efforts, Pichai said no, and insisted that his family only has one computer at home.

‘I Had to Explain How Paper Money Works’

Pichai said his son understands a lot more about virtual currencies than he does about fiat currency, so he had to explain how money works in real life.

“I had [to] explain to him how paper money actually works,” Pichai laughed. “I realized he understood ethereum better than how paper money works. I had to talk to him about the banking system, the importance of it. It was a good conversation.”

In July 2018, Google co-founder Sergey Brin revealed that he mines ethereum with his son, as CCN has reported.

“A year or two ago, my son insisted that we needed to get a gaming PC,” Brin said. “I told him, ‘Okay, if we get a gaming PC, we have to mine cryptocurrency. So we set up an ethereum miner on there.”

Brin — whose net worth tops a staggering $47 billion — added that he and his son had made some money on crypto-mining.

“We’ve made a few pennies, a few dollars,” he joked.

Sergey Brin: ‘We Are in a Tech Renaissance’

As CCN reported, Brin has previously credited ethereum mining with playing a central role in the recent computing boom that is driving a “technology renaissance.”

Brin made the revelations in an enthusiastic letter to investors, where he raved: “We are truly in a technology renaissance, an exciting time where we can see applications across nearly every segment of modern society.”

Brin added: “There are several factors at play in this boom of computing. First, of course, is the steady hum of Moore’s Law…The second factor is greater demand, stemming from advanced graphics in gaming and, surprisingly, from the GPU-friendly proof-of-work algorithms found in some of today’s leading cryptocurrencies, such as ethereum.”

Blockchain technology company Bitfury is considering a potential Initial Public Offering (IPO), which could reportedly become the first major public listing in the crypto industry in Europe, Bloomberg reported Oct. 25.

People familiar with the matter reportedly told Bloomberg that Bitfury is examining a range of options including raising debt financing or selling a minority stake. Should Bitfury go public in the following two years, its value could reach from $3 billion to $5 billion. However, the numbers could change depending on the markets and the health of the industry, purported sources told Bloomberg.

Bitfury has reportedly contacted global investment banks ahead of a potential IPO in London, Amsterdam, or Hong Kong next year.

Bitfury was founded in 2011 and is recognized as the largest non-Chinese company that develops Bitcoin (BTC) blockchain software and provides infrastructure for BTC mining. The company also developed a more efficient algorithm for routing on the Lightning network called Flare, which operates as a secure off-chain channel for faster transactions with less commissions.

Last month, Bitfury launched a new generation of its BTC mining hardware based on an Application-Specific Integrated Circuit (ASIC) chip, Bitfury Clarke. The chip is sold individually in addition to being integrated into Bitfury’s other BTC mining hardware. Bitfury is planning to implement the new ASIC in its mining centers in Canada, Iceland, Georgia, and Norway, where the company received governmental approval in March.

In July, Toronto-based BTC mining company Hut 8 announced the completion of its second mining facility in Canada, claiming to have become the world’s “largest publicly-traded” operator by capacity. The project was launched through a partnership with BitFury, which provided the company access to mining hardware and other necessities.

Hackers are illegally generating Monero, Bitcoin and other cryptocurrencies by exploiting a software flaw that was leaked from the U.S. government, according to new research, raising questions about the security of one of the fastest-growing corners of financial markets.

Detected cases of illicit cryptocurrency mining — the digital equivalent of minting money — have surged 459 percent in 2018 compared to last year, Cyber Threat Alliance said in a report released Wednesday.

The spike is tied to the 2017 leak of Eternal Blue, a tool to exploit vulnerabilities in outdated Microsoft Systems software. When the tool became known, it tipped hackers to a previously unknown flaw in the software, now the basis of some hackers’ efforts to commandeer computing power of others to generate digital currency.

As of July this year, 85 percent of all illicit cryptocurrency mining has targeted Monero, according to the report. Bitcoin made up about 8 percent, while other cryptocurrencies accounted for 7 percent.

Hackers can “sit back and watch the money roll in,” said Neil Jenkins, chief analytic officer of Cyber Threat Alliance, a group formed in 2014 by a consortium of cyber-security firms to share intelligence about cyber-threats. While the hacks are occurring across the globe, a significant portion are in the U.S., he added.

Bitcoin and other cryptocurrencies are generated through a process of solving complex mathematical equations, which requires significant computing power. Most users and investors lack the means to create, or mine, cryptocurrency and simply buy it from an online exchange. When hackers illicitly generate currency using others’ computers, it creates free money for them and could erode the overall value of the currency by increasing its supply.

Eternal Blue was allegedly stolen from the National Security Agency and leaked last year in an unsolved breach by a hacking group that calls itself the Shadow Brokers. The group has repeatedly released tools from that breach.

The code gained notoriety when Russia and North Korea used it in massive attacks. In the first instance, known as WannaCry, North Korean hackersshut down computers in dozens of countries, including Britain, where hospitals were hit. In the second, known as NotPetya, Russia used Eternal Blue to hack computers at companies including Denmark’s A.P. Moller-Maersk A/S, leading to billions of dollars of damage, according to the White House.

“A security update was released in March 2017. Customers who applied the update are protected,” Jeff Jones, a senior director at Microsoft Corp., said in a statement.

The NSA declined a request for comment.

“The threat of illicit cryptocurrency mining represents an increasingly common cybersecurity risk for enterprises and individuals,” according to the report. And the “rapid growth shows no signs of slowing down.”

The CEO of China-based crypto mining pool F2Pool posted a company-branded infographic September 6 that indicates at what minimum price points the mining of various cryptocurrencies becomes unprofitable.

Shixing Mao, co-founder and CEO and of the world’s sixth largest mining pool F2Pool, published a list of price levels for major cryptocurrencies, such as Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and Zcash (ZEC) below which mining said currency with various different miners allegedly becomes unprofitable.

According to Mao’s graphic, if Bitcoin’s price hits lower than 36,792 yuan (about $5,376) point, this would mean that mining the cryptocurrency on an Antminer T9 would be unprofitable. In the case of using an S7 model miner, the break-even point amounts to a significantly higher 79,258 yuan (about $11,581) Bitcoin price point.

Break-even price points for different cryptocurrencies and miners

Break-even price points for different cryptocurrencies and miners Source: F2Pool’s CEO Weibo

In contrast to S7, mining Bitcoin on Antminer T9 model that was released in January 2017, is still profit-making at Bitcoin’s currently prices, while the newer Innosilicon T2 has the lowest threshold, amounting to 26,636 yuan or about $3,891.

At press time, Bitcoin is trading at $6,452, according to Cointelegraph’s Bitcoin Price Index

In mid-August, U.S. graphics processing unit (GPU) manufacturer Nvidia revealed that crypto mining hardware sales were much lower than expected in Q2 2018, claiming that the company does not expect to make significant blockchain-related sales for the rest of the year.

In July, major Taiwanese microchips producer TSMC once again decreased its annual revenue and capital expenditure estimates, following growth rate reduction in the crypto mining field, among other areas.

In efforts to boost its market-based economy, the government of Uzbekistan has decided to take initiatives favorable to the growing cryptocurrency industry.

Uzbekistan Goes Fishing for Bitcoin Exchanges

The former Soviet nation confirmed that it is legalizing cryptocurrency exchanges and will allow blockchain companies to set up their offices in the state. The legalization came in the wake of a presidential decree that was signed to encourage the use of cryptocurrency and blockchain in Uzbekistan.

A document published at the behest of the president of the Republic of Uzbekistan, titled “On measures to organize the activities of crypto-exchanges in Uzbekistan,” revealed a set of official definitions for bitcoin-like cryptocurrencies. The state has confirmed that it will not treat cryptocurrencies like securities. Therefore, the laws that are common to security exchanges will not bother cryptocurrency exchanges.

Instead, the crypto trading businesses will come under a new set of rules, referred to as special normative acts.

Only foreign legal entities which already have a subsidiary or other enterprises in Uzbekistan will be able to open cryptocurrency exchanges. These entities will not be liable to pay taxes on their cryptocurrency turnovers. That said, any revenue derived in cryptocurrency will be untaxable, considering Uzbekistan will define cryptoassets as a set of data records on blockchain — which they indeed are — that has value and owner, according to the text.

Terms and Conditions Applied

The free perks won’t be precisely free because the Uzbekistani government has also imposed special conditions to setup crypto exchanges.

Firstly, the foreign entities must have an authorized capital to support as much as 30,000 minimum wages on the day they apply. Moreover, an equivalent of 20,000 minimum wages will have to be reserved in a state-backed commercial bank. The minimum monthly salary in Uzbekistan was close to $185 in FY2017.

Secondly, the state requires the crypto-exchanges to base their servers in Uzbekistan.

Thirdly, Uzbekistan willrequire the exchanges to adhere to rules for trading and publishing exchanges rates based on a demand-and-supply ratio.

Finally, the exchanges must store information on transactions, users identification, and other KYC/AML-based data for five years.

Crypto Mining Industry Also Gets a Share

The presidential decree also legalizes cryptocurrency mining in Uzbekistan and has ordered state-controlled energy companies to allocate lands for mining operations. The bitcoin mining companies will be utilizing over 100 KW/h of electricity on locations designated by the National Project Management Agency, a body governed by the President’s office itself.

The Iranian government has recognized cryptocurrency mining as a lawful activity as part of its effort to introduce a national cryptocurrency – a move that saw bitcoin’s price briefly spike to record levels on local exchanges.

According to news agency IBENA, which is affiliated to the Central Bank of Iran, Abolhassan Firouzabadi, the Secretary of Iran’s Supreme Council of Cyberspace stated on Tuesday that cryptocurrency mining “has been accepted as an industry in the government.”

Further, the official said the decision was arrived at after consensus among other relevant government agencies such as the Ministry of Communications and Information Technology, the Central Bank and the Ministry of Economic Affairs and Finance, although a final policy legislating for the activity hasn’t been declared as yet.

The move to recognize cryptocurrency mining comes as the country is taking efforts to create its own central bank digital currency as a means to bypass the U.S. economic sanctions recently reimposed by President Trump, as previously reported by CoinDesk.

Firouzabadi added that a national cryptocurrency remains a “promising” tool to facilitate financial transactions with Iran’s trade partners, as the Trump administration has restricted the country’s access to U.S. dollars.

With regard to cryptocurrency trading activities, the official further said “a decision-making authority will declare the framework and final policies for trade and participation of startups and trade activists in the cryptocurrency sphere by September but no definitive decision has been taken yet.”

CoinDesk also reported in July that cryptocurrency investors in Iran then appeared to be facing restrictions from the state, with users being blocked from accessing accounts at exchanges such as Binance, even if using virtual private networks or VPNs.

Following the country’s recognition of crypto mining, reports indicate that the price of bitcoin on some local exchanges such as Exir peaked to over $24,000 – exceeding the global average all-time high of $20,000 seen in December – while prices elsewhere yesterday were around $7,000.

Data from CryptoCompare backs up the reports, indicating that OTC trading prices on LocalBitcoins briefly reached as high as $25,000.