Russian authorities have announced plans to ban crypto mining across occupied territories of Ukraine as the war between the two nations ticked over into its thousandth day.

Russia’s Deputy Prime Minister Alexander Novak led a meeting attended by top ministers at which they reportedly discussed the country’s “difficult regime-balance” and how it is impacting an electricity industry that sees a lack of supply and capacity during the autumn-winter months. 

According to the Moscow Times, Russia’s government is covering all bases — including invaded ones — with a proposed crypto mining ban that extends to captured Ukraine territories, such as the Donetsk, Lugansk, Zaporizhia, and Kherson regions. 

Read more: Paraguay shuts illegal bitcoin mines that stole enough power to light a city

A further six territories in Russia’s North Caucasus region will also face a flat-out ban on crypto mining activities until 2031. The Irkutsk, some of Buryatia, and Zabaikalsky Krai regions will face a partial mining ban in the autumn-winter months until 2031.

Russia passed a law in July that legalized crypto mining from November 1. That means there were just 18 days between its legalization and banning.

Today marks 1,000 days since Russia decided to invade Ukraine. Today also saw the first time Ukraine launched US-provided long-range missiles into Russian territory since the White House lifted a ban on their use in the conflict. 

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In a recent viral video, HBO talk show host Bill Maher wholeheartedly broadcasted his belief that crypto mining consumes 8% of world electricity production. Unfortunately for Bill, that’s completely untrue.

In fact, the real figure is less than 1%. Estimates range from 90 to a maximum of 240 terawatt-hours (TWh) per year, with most estimates for worldwide bitcoin mining in 2023 nearer to 121 TWh. Even the US Energy Administration estimates somewhere in the region of 120 TWh.

Although significant, this figure isn’t even a single percentage point of global electricity consumption in 2023, which totaled over 27,000 TWh. Even using the highest, 240 TWh figure, crypto mining’s electricity consumption would still be below 1%.

Maher broadcast the claim across national television and internet streaming services, including in posts to his 10.8 million followers on X (formerly twitter) and 938,000 on Instagram.

Viewers dunk on the talk show host

Comments rained in — many laughing at Maher’s obvious error. “This has been debunked at length,” wrote Fil Hanson on Instagram. “This is embarrassingly wrong and reflective of your ignorance of the topic,” added Todd Leonardi. “Reiterating a talking point without any research into it,” lamented Matt Blumenberg.

Read more: Bitcoin mining is more difficult than ever

On X, Bitcoiners attempted to ratio Maher’s post with comments like “You’ve embarrassed yourself on live TV well done” and “This is embarrassing, even for you.” 

Maher’s social media accounts, which are likely controlled by an agency, have not responded to any of the criticisms. Protos reached out to Maher for comment but hadn’t received a response prior to publication time. 

A single crypto asset, bitcoin, consumes more than 90% of all electricity production across all proof-of-work blockchains. That said, even tripling or quadrupling the highest estimates of crypto’s electricity use wouldn’t get anywhere close to Maher’s claim of 8%.

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Iran’s state power company is offering citizens who expose illegal crypto miners a $20 bounty as the country struggles with power shortages and severe heatwaves.

As reported by Iran International, officials from state-backed electricity firm Tavanir say illegal crypto miners, as well as a 49.7C (121F) heatwave, are causing significant disruptions to the country’s electricity network.

“Opportunistic individuals have been exploiting subsidized electricity and public networks to mine cryptocurrencies without proper authorization,” said Tavanir’s CEO Mostafa Rajabi Mashhadi.

To help encourage the public to out illegal miners, Mashahadi announced that “a bounty of one million toman (approximately $23) will be awarded to individuals who report every single unauthorized cryptocurrency mining equipment.”

Read more: Malaysian minister says crypto miners behind $722M electricity theft

According to Iran International, industrial production is facing a crisis as frequent power outages are repeatedly halting operations.

Iran discovered over 230,000 illegal cryptocurrency mining devices according to Tavanir’s CEO. He compared their electricity consumption to that of the Markazi Province saying, “Providing this amount of electricity would require the construction of a 1,300-megawatt power plant.”

Power demand major factor in crypto miner crackdown

Paraguay’s national energy supplier announced in July it had shut down 70 illegal bitcoin mines in the past five years, claiming that illicit crypto mines were stealing $60 million worth of electricity every year. 

In that same month, a Malaysian minister claimed illegal crypto miners were responsible for stealing $722 million worth of electricity between 2018 and 2023.

Iran banned crypto mining in 2021 in response to similar power shortages and blackouts but later lifted the ban after the US implemented sanctions against the country.

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An Airbnb owner has been forced to implement a new ‘no crypto mining policy’ after a tenant installed 10 mining rigs that racked up a $1,500 electricity bill in just three weeks.

Ashley, who runs a TikTok channel about her Airbnb experience, said her guest brought the computers to mine crypto at her property and also installed an electric vehicle charging point. 

“It was cheaper for them to rent a house to pay for that electricity,” she said.

The guest was apparently honest about his crypto mining and told Ashley that he made over $100,000 during his stay.

She’s not the only Airbnb host with a crypto mining problem

Other Airbnb hosts have also complained about crypto miners running up their electricity bills. One user replying to Ashley said, “I also have in my rules no crypto mining. It’s ridiculous we have to do this.” 

Another user in the UK revealed on an Airbnb forum that they believed their guests were mining bitcoin and that it caused their bill to increase by thousands of pounds. One user took to another forum to warn hosts that crypto mining doubled the electricity bill of her apartment. 

One host also described how they kicked their guests out after their electricity firm noticed a dramatic increase in their power usage. The host estimated the crypto miners would’ve made a $6,000 dent in electricity costs had they not been removed. 

Protos has contacted Airbnb for comment. 

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Illegal Malaysian crypto miners stole $722 million worth of electricity between 2018 and 2023, according to the country’s deputy minister of energy transition and water transformation.

As reported by Malay Mail, Akmal Nasrullah Mohd Nasir revealed the figure at an event to mark the disposal of 2,022 seized items, including bitcoin mining equipment.

“The theft of electricity by those who mine cryptocurrency occurs because they believe this activity cannot be detected due to the absence of meters on their premises,” said Akmal Nasrullah. He added, “Energy supply companies have various methods to detect unusual energy consumption in an area.”

Read more: Europol says alleged crypto miner made millions from stolen electricity

He also claimed that stopping crypto miners from stealing electricity is a priority for Malaysia’s government. This is alongside boosting the production of renewable energy.

According to the minister, crypto miners involved in electricity theft are detrimental to Malaysia’s only utility company, the Tenaga Nasional Berhad, and to Malaysia and its people.  

Electricity theft involves using electricity without paying for it or appropriately registering with the relevant utility company. Individuals can illegally tamper and bypass electricity meters or redirect electricity from a power line. 

Last year a report found that crypto mining and cannabis farms in the UK contributed to a rise in electricity theft. Additionally, a crypto miner arrested by Europol and Ukraine this year was said to have made $2 million mining crypto while stealing electricity. 

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The US Energy Information Administration (EIA) has been accused of “federal overreach” and of abusing its authority after it was announced that it would granted the power to regularly collect energy use data from crypto miners, reports Bloomberg.

Last week, in an emergency request that was approved by the Office of Management and Budget (OMB), the EIA was cleared to demand that commercial crypto miners share their energy usage details as part of a survey titled Proposed Emergency Survey — Cryptocurrency Mining Facilities.

The clearance was granted as a matter of urgency after the EIA claimed that a combination of a major cold snap in the US and increased crypto mining activity brought about by the increasing price of bitcoin may cause “heightened uncertainty in electric power markets.”

It also alleged in its request that “public harm is reasonably likely if normal clearance procedures are followed.”

However, despite these claims, the move has drawn strong criticism from two groups in particular.

In a statement, Texas Blockchain Council president Lee Bratcher and Perianne Boring, chief exec of the Chamber of Digital Commerce said, “The EIA’s emergency action is tantamount to federal overreach and has implications for all industries that rely on data centers for their operations.”

They added that the move was “politically motivated to help the White House achieve its goals to cut greenhouse gas emissions.”

Read more: Europol says alleged crypto miner made millions from stolen electricity

In response, the EIA stated, “We conduct dozens of surveys with energy producers and consumers — some of which we’ve been conducting for decades. We’re hopeful we can work with companies in the cryptocurrency industry to provide the American public with a clear understanding of energy use.”

According to the EIA, in 2023, crypto mining was responsible for up to 2.3% of the USA’s entire electricity use.

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On Thursday, activist short-seller J Capital Research published its investigation into the once-multi-billion dollar Bitcoin miner Hut 8. Investors immediately offloaded shares which dropped from above $9 when the report was published to $7 by the close of trading.

Hut 8 shed hundreds of millions of dollars in market capitalization within hours of J Capital’s report. By close of trading, shares had dropped by 22% from over $9 to $7.

J Capital listed a litany of red flags, including backing by penny stock promoters, all-in mining costs of $60,000 per bitcoin, dubious executives, multiple run-ins with regulators, and the risk of dilutive financings.

The firm’s public relations department has penned a rebuttal. However, shares are still trading below Thursday’s closing price.

Why J Capital’s allegations against Hut 8 matter

Hut 8 recently merged with US Bitcoin Corp. The combined company, now named Hut 8 Corp, uplisted to NASDAQ under the ticker HUT. J Capital coincided its actual short with its research report, acknowledging its financial conflict of interest in releasing the findings. By its own, prominent admission, “We are biased… We will profit if these stocks decline.”

Before the 2023 merger, Hut 8 traded as high as $82.50 per share. At press time, it’s trading around $6.80.

Notwithstanding this financial conflict of interests, many investors still pay attention to certain shortsellers. Wall Street mostly pays attention because J Capital reports have preceded several stock declines of -90% or worse.

Previous short calls by J Capital include Bit Mining Ltd. It revealed that Bit Mining, which was apparently started as a Chinese lottery operation and pivoted into digital assets, had been losing money since 2015 and overstated its earnings. It has declined from a 2014 high of $370 to below $4 today.

J Capital also has experience in researching Bitcoin mining companies. Indeed, it called out Bit Digital’s poor track record and run-ins with law enforcement and even questioned whether its mining rigs existed at all. It made its call in 2021 when Bit Digital was trading as high as $24.30. At press time, it sits below $2.70.

Read more: Place your bets: How many bitcoin miners will survive winter?

J Capital uncovered legal troubles and shady execs

J Capital investigated Hut 8’s curious merger with US Bitcoin Corp and discovered its past legal troubles. For example, it highlighted a million-dollar settlement in New York for alleged securities regulation violations. Hut 8 also paid a fine for noise ordinance violations to a municipality where it operated a mining facility.

Moreover, J Capital guessed US Bitcoin Corp would probably have gone bankrupt if it hadn’t been acquired. Its researchers also questioned the acquisition of assets from a now-bankrupt company, Compute North.

Its report also criticized management. For example, US Bitcoin Corp’s co-founder and former CEO Michael Ho is Hut 8’s current CSO and director. Ho is an ex-used car salesman allegedly involved in several pump-and-dump schemes, according to J Capital.

US Bitcoin Corp’s other co-founder Asher Genoot has become President of Hut 8. J Capital says Genoot has worked at a string of failed startups.

J Capital also flagged US Bitcoin Corp’s shareholders connected to several collapsed penny stocks. These Miami and Vancouver-based promoters received Hut 8 stock at generous conversion rates through the merger. For example, J Capital cited US Bitcoin Corp’s preferential right to 0.2 HUT common share per USBTC common share and 0.6716 HUT common shares per USBTC capital stock.

J Capital believes these shareholders add little value to the post-merger company besides selling pressure. Indeed, Hut 8’s share price declined soon after it announced the merger. It then declined even further after J Capital’s report.

Down 90% from all-time highs

J Capital Research set alarm bells ringing about Hut 8 after its successful bets against other public companies.

Now that post-merger Hut 8 has granted equity to questionable investors for assets of US Bitcoin Corp, J Capital believes selling shareholders plus dilutive financings will overhang on shares for some time to come.

So far, J Capital’s predictions have been prescient with Hut 8 shares trading below $7. The company was once a multi-billion dollar bitcoin miner but today trades at a $600 million market capitalization.

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Edit 10:10 UTC, Jan 24: Article updated to specify that Hut 8 traded at $82.50 per share before its merger with US Bitcoin Corp.

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A 29-year-old alleged cryptojacking “mastermind” was arrested by Ukraine and Europol last week and accused of mining $2 million worth of crypto using stolen computational power.

According to a press release from Europol, the suspect was arrested on January 9 in Mykolaiv after an unnamed cloud provider tipped off authorities after its user accounts had been compromised.

The provider, Europol, and Ukrainian authorities then worked together to investigate the scheme.  

According to The Register, three properties were raided during the investigation and the alleged miner is currently being held in Ukraine under judicial secrecy. The cloud provider also remains unnamed.

Read more: Illegal crypto mining rigs found in Poland’s Supreme Administrative Court

Cryptojacking is essentially the unauthorized access of computing infrastructure by malicious actors who want to redirect computational power to crypto miners. Through this process, cryptojackers can avoid paying costly bills and pass them on to the targeted cloud providers. 

Indeed, according to a 2022 threat report from Sysdig, cited by The Register, cryptojackers reportedly make $1 in profit for every $53 in victim-paid bills. Using this estimate, the 29-year-old in question could potentially have cost providers $106 million in bills.

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A Russian crypto miner was reportedly kidnapped on Christmas day and was told he would be framed for drug crimes if a 15 million ruble ($164,000) ransom wasn’t paid.

The events were reported by Russian news outlet Ren TV. The 23-year-old was kidnapped outside his home in Izhevsk and bundled into a car by three men, reports say.

The kidnappers drove to an unknown location before calling the victim’s brother on Telegram, demanding over 15 million rubles in exchange for his freedom. The men reportedly threatened to frame the victim by planting drugs and handing him over to the police if the brother failed to comply.

According to the outlet, one of the kidnappers is said to have known the hostage personally. The car used to carry out the kidnapping may have also been stolen, as it appears to be registered to a pensioner living in Perm. 

Read more: ‘Crypto millionaire’ found dead in Ozarks was involved in kidnapping

The three men are said to hold criminal records relating to robbery and extortion. Police have detained the alleged kidnappers, who now face up to 12 years behind bars.

Crypto-related kidnappings are nothing new. Amid the bankruptcy of a self-proclaimed ‘Crypto King’ Aiden Pleterski — a man accused of stealing $40 million — his disgruntled investors reportedly kidnapped and beat him. 

In a separate case from May, a crypto investor holidaying in Spain was held hostage by armed kidnappers. The group sought a million-dollar ransom in exchange for the man’s freedom and even prepared a room for butchery.

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A crypto YouTuber has been accused by a Minnesota electricity supplier of attempting to bribe its employees so he could upgrade a bitcoin mine that had already stolen hundreds of thousands of dollars worth of electricity.

As reported by the Wadena Pioneer Journal, the lawsuit submitted on November 21 accuses Minnesota residents Ryan Jaenicke and his former girlfriend Tina Fehlhaber of a “greed-fuelled conspiracy” that saw them steal power from North Star Electric Cooperative to power a bitcoin mine in Roosevelt.

In June last year, North Star noticed increased electricity use on an old line that once powered a property in Roosevelt. The house’s electricity supply was reportedly disconnected in 2018 after the previous owners left. 

The property was owned by TiMar, a company owned by Fehlhaber and affiliated with Jaenicke, and had not applied for North Star electricity. 

During a subsequent investigation, North Star discovered an old meter box that had been tampered with to redistribute electricity from the North Star network to two electrical transformers and the Roosevelt property.

North Star, working with law enforcement, was able to observe an estimated 26 crypto-mining units at the property. However, when police returned with a search warrant, the mining devices were gone. Witnesses reportedly saw the pair remove the devices from the property.

YouTuber turned to bribery to upgrade mine

Jaenicke runs a YouTube channel called ‘Degenerate Income’ where he reportedly shows viewers different ways to earn a passive income through “degenerate plays in the decentralized finance space.” 

In several transcribed Facebook messages shared in the lawsuit, Jaenicke is shown attempting to bribe a North Star employee. He allegedly offers $2,000 in cash to upgrade a fuse box in secret, however, the employee refuses, saying “I can’t risk my career.” Jaenicke offers a further $5,000 but is rejected again and told he’s “got the wrong guy.”

North Star is seeking damages and to retrieve any profits that the pair may have made using the stolen power. The company added that the defendants should follow Jaenicke’s own published advice and “be a man” and “own up to your mistakes.”

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