Bitcoin miner jailed for 3.5 years for stealing electricity from train network

A Chinese man has been sentenced to three and a half years in prison and fined RMB 100,000 (around $14,500) after pleading guilty to stealing electricity from the country’s train network to power his bitcoin mining activities, according to a report by local media.

From November to December last year, Xu Xinghu, from Datong, a city in northwestern China’s Shanxi province, stole RMB 104,000 worth of electricity from train network power lines, using it to run 50 bitcoin miners and three cooling fans he operated in a rented house nearby.

By April of this year, Xu had mined 3.2 bitcoins, worth around RMB 120,000. His mining equipment was confiscated following his sentencing, which took place in September but was reported on October 8.

Despite China’s crackdown on cryptocurrency trading and initial coin offerings, bitcoin mining is not banned in the country. That means it’s legal for anyone to mine the bitcoins as long as they have the suitable hardware and internet access needed to carry out the computationally intensive work.

Heavy investment and related costs, especially pricey power charges, make bitcoin mining almost impossible for the average citizen. Mining a single bitcoin consumes an average of 18,000 kilowatt-hours (kWh) of power, pushing some people to seek illegal means to secure power supply.

Xu is not the first person to get nabbed for illicit electricity tapping. As early as 2016, authorities in Daqing, a city in northern China’s Heilongjiang province, cracked down on a group of bitcoin miners who stole electricity from oil refineries there.

In April, a family in southern China was discovered to have been stealing electricity from the state-owned electricity grid, also for the purpose of bitcoin mining.

As the price of Bitcoin drops, it’s becoming increasingly difficult to mine profitably. According to blockchain website Walian, miners cannot generate profit when the bitcoin price is lower than RMB 44,000. Bitcoin price currently stands at around RMB 45,680.