A hidden mine in a pigsty in a rural area of ​​Tangshan, where power supply company employees and environmental protection bureau officials stole electricity to mine

Text: Ratchet

Source: A Blockchain

In order to make money, miners from all over the country take risks and choose to steal electricity to mine. Among them, Kaiping District in Tangshan City, Hebei Province, is the hardest hit area for stealing electricity to mine.

When the theft of electricity for mining in Kaiping was at its craziest, some villages were almost "stealing electricity by the entire village", and there were people standing guard at the village entrance 24 hours a day to tip off the miners.

There are also power company employees who collect protection fees and become umbrellas for power thieves. Even the deputy director of the Environmental Protection Bureau in Kaiping District has joined the army of stealing electricity for mining.

In the end, they all couldn't escape the law.

In December 2019, the Judicial Documents Network published a verdict, and a major case of stealing electricity for mining came to light.

The verdict stated that on June 6, 2018, the police in Kaiping District, Tangshan City received a report that someone might be stealing electricity in the courtyard of a ceramic factory in Kaiping.

When the police arrived, they found that the compound was empty, but there were 855 Bitcoin mining machines running. As expected, the electricity in the compound was stolen.

The police investigation found that the owners of these mining machines were Pei and Wang. As early as June 2017, they began to purchase mining machines and prepared to steal electricity for mining.

In order to find a place to steal electricity, Wang mobilized her husband, Liu Guangjun, deputy director of the Kaiping District Environmental Protection Bureau and captain of the Environmental Law Enforcement Brigade. He remembered that he had investigated a company before, and the company's yard had been vacant since then, which was just right for stealing electricity for mining.

In order to evade inspection, the group of electricity thieves also contacted Li, an employee of the power inspection team of Tangshan Power Supply Company. They paid Li 20,000 to 30,000 yuan in protection money every month to help tip off the suspects.

The case of stealing electricity for mining, in which the deputy director of the district environmental protection bureau personally participated, finally came to light. The entire stealing gang stole a total of 260,000 yuan of electricity, and the main culprits Pei, Wang, and Li were sentenced to four and a half years, three and a half years, and three years and eight months respectively.

Liu Guangjun was identified as an accomplice and sentenced to one year and ten months in prison. (Note: He was convicted of bribery for another case involving 270,000 yuan in bribes and sentenced to three years in prison for both crimes.)

The deputy director of the Environmental Protection Bureau, who was supposed to crack down on electricity theft, was imprisoned because of it. This case caused an uproar in Kaiping.

In fact, Kaiping has long been a disaster area for stealing electricity for mining in China. In recent years, there have been many cases of stealing electricity for mining in Kaiping.

On the judicial data platform OpenLaw, a blockchain search using the keyword "Bitcoin mining machine stealing electricity" found 33 judicial documents, of which 7 were related to Kaiping, accounting for as much as 21%.

Why has Kaiping become a severely affected area for stealing electricity for mining?

"The answer is simple. Kaiping has a tradition of stealing electricity." Wang Bo, a villager in a village in Kaiping, told Yiben Blockchain.

Kaiping is a district of the heavy industrial city of Tangshan and also its core industrial zone. China's first coal mine and first railway were both built in Kaiping. To this day, Kaiping is still dotted with all kinds of industrial enterprises.

Heavy industrial enterprises consume a lot of electricity, so in order to save money, factory managers would naturally think about the electricity bill. "Some small steel mills can save 50 to 60 million yuan a year by stealing electricity," said Wang Bo. These factory managers became the initiators of Kaiping's electricity theft.

The rampant theft of electricity has even given rise to a "meter-changing team" in Kaiping. They make a living by modifying electricity meters and helping people steal electricity. Ordinary residents only need to spend three to five hundred yuan to ask the "meter-changing team" to come to their homes to modify the electricity meter and join the ranks of electricity theft.

When the electricity theft in Kaiping was at its craziest, people with connections to the power supply company even took the initiative to come to residents' homes and recommend the "meter-changing team" to them.

A document released by Kaiping police in October 2018 showed that Yuan, a temporary employee of Kaiping Power Supply Company, was responsible for collecting electricity bills door-to-door. His side job was to promote the "meter-changing team"'s electricity theft business to residents while collecting the bills.

The rampant theft of electricity has seriously disrupted Kaiping's power supply, causing great suffering to ordinary people.

"Since 2018, many villages in Kaiping have experienced power outages every other day, and transformers have often caught fire," said Wang Bo. "This is all caused by the gang that stole electricity."

During that period, Kaiping's voltage was unstable. "In the middle of the night, the voltage would drop in households that didn't steal electricity. My home's voltage dropped to as low as 110V, and the lights were much dimmer than normal. My computer and washing machine couldn't even turn on," said Wang Bo.

At this time, if you want to use electricity, there are two ways. One is to buy a voltage stabilizer. The other is to modify the meter to steal electricity.

"If you change the meter, you will pay less electricity bill, but if you buy a voltage stabilizer, you will pay more electricity bill. After a long time, those who buy the voltage stabilizer will be laughed at as 'fools'." Wang Bo said that many Kaiping residents change meters to steal electricity out of helplessness, "others steal but you don't, you don't even need electricity."

How rampant is electricity theft in Kaiping? The line loss rate data of the power supply company shows this.

Line loss rate is the ratio of electricity loss during transmission and distribution. If no one steals electricity, the line loss rate of the power grid can be kept below 5%.

But in Kaiping, the line loss rate once reached as high as 70%.

This means that at the peak, more than 60% of the electricity in Kaiping District was stolen.

In 2017, Bitcoin mining was introduced to Kaiping. This business of directly converting electricity into money drove the electricity thieves in Kaiping completely crazy.

In 2018, the electricity theft business in Kaiping District reached its peak.

"The craziest time for electricity theft in Kaiping was when 'the whole village was stealing electricity'." Zhao Jianhua, a villager in Tangshan, told Yiben Blockchain.

Zhao Jianhua is not from Kaiping, but he has visited the "stealing electricity for mining" project in Kaiping. He said that the worst-hit area of ​​electricity theft in Tangshan is Kaiping, while the worst-hit areas of electricity theft in Kaiping are in the three towns of Liyuan, Shuangqiao and Wali.

According to him, in 2018, in the villages in these towns, almost all the young and middle-aged people who neither farmed nor worked and were idle every day learned how to mine Bitcoin.

Where do they get the mining machines that they use to steal electricity for mining?

Zhao Jianhua revealed that in Tangshan, the jargon for Bitcoin mining machines is called "machines". If you want to buy a "machine", you can ask someone to order it from Guangdong, or you can go to the local digital city in Tangshan and buy it yourself.

A blockchain visited Tangshan Ruide Digital City. There were no advertisements for mining machines in the city, but many merchants said that there were always "machines" for sale in a certain audio store on the third floor.

The owner of this audio store told Yiben Blockchain that the "machine" they had was a second-hand S9, "more than 200 yuan each."

With the mining machines, unemployed young people in rural areas have become the main force in stealing electricity and mining in Kaiping.

"Everyone can just put the mining machine in the yard. As long as there is a shelf and a awning, they can mine," said Zhao Jianhua.

They would directly hire electricians in the village to modify the electricity meters, privately install electrical wires, and even hire the elderly and disabled in the village to take turns on duty 24 hours a day and stand guard at the village entrance.

"Once people or cars from other villages enter the village, the sentries will stop them and question them," said Zhao Jianhua.

Of course, these sentinels will not stop outsiders all the time, but they can delay time and inform the villagers.

Once an outsider enters the village, the village electrician will receive an order to restore the meter to normal so that the inspectors cannot get any evidence. The miners will shut down the mining machine. Once the mining machine is turned off, there will be no sound, making it difficult to be discovered.

Some villages even offer electricity theft and hosting services for mining machines: as long as you buy a mining machine, you can host the machine in the village and be a hands-off shopkeeper. The villagers are responsible for stealing electricity and maintaining the mining machine.

"I can earn several hundred yuan in monthly hosting fees for a machine," said Zhao Jianhua.

It was obviously impossible to hide this rampant act of stealing electricity throughout the village from the village cadres, and some village cadres were also implicated.

The government would not sit idly by and watch the rampant theft of electricity. The crackdown on the theft of electricity soon began.

On September 30, 2018, Tangshan City held a deployment meeting to combat electricity theft in key areas. The meeting was chaired by Huang Sanping, deputy mayor of Tangshan and director of the Municipal Public Security Bureau.

At the meeting, he shouted the slogan of "burning our boats and fighting to the death" in order to crack down on electricity theft.

The next day, October 1, all the district-level departments and public security organs in Kaiping also gathered for a meeting. This day was the first day of the National Day holiday, and it was very rare to hold a meeting at this time.

"The deputy director of the municipal bureau, the district mayor, the village secretaries, and the chiefs of the police stations are all here." A retired staff member of the Kaiping Public Security Bureau told Yiben Blockchain that the meeting lasted a whole day.

"During the National Day holiday in 2018, Kaiping's public security and power supply companies did not take a single day off," said the above person.

Kaiping held a mobilization meeting for the special campaign against electricity theft on October 1, 2018

Image source: Kaiping District People's Government official website

The crackdown was launched quickly. The retired police officer summarized the Kaiping public security, procuratorial and judicial systems’ crackdown on electricity theft and mining as “prison sentences for major cases, detention for minor cases, and fines for minor cases.”

Data released by Kaiping police show that from October 1 to November 7, 2018, Kaiping police dispatched a total of 2,650 police officers, seized 606 electricity theft users, filed 7 criminal cases, detained 14 people, filed 60 public security cases of various types, detained 57 people, and confiscated 2,635 bitcoin mining machines.

Among them, in the first week of October 2018 alone, the wife of a current village party branch secretary was detained and the wife of a former village party branch secretary was taken into criminal coercive measures.

In addition, 2,625 households went to the power supply station and village committee to pay the electricity bills and liquidated damages, totaling 5.494 million yuan in liquidated damages.

Liu Guangjun, former deputy director of the Kaiping District Environmental Protection Bureau and captain of the Environmental Law Enforcement Brigade, was also subject to compulsory measures during this period.

"Liu Guangjun's arrest was an accident, but the district obviously wanted to make an example of him." The retired public security official said that during Liu Guangjun's trial, "the Discipline Inspection Commission arranged for more than 20 district cadres to attend as observers."

At the same time, Kaiping also began to carry out vigorous anti-electricity theft propaganda in its jurisdiction.

"Every village in Kaiping has posted banners to crack down on electricity theft, and the village loudspeakers have been broadcasting that stealing electricity is shameful," said Wang Bo.

A banner was posted in a village in Kaiping to crack down on electricity theft

Kaiping District's crackdown on electricity theft crimes has been successful.

A document released by the Kaiping District Court in April 2019 showed that the average daily electricity consumption in the Kaiping area dropped from nearly 7 million kWh in the first quarter of 2018 to about 3 million kWh, and the daily average line loss rate dropped from a peak of 70% to below 25%, saving the country nearly 3 million yuan in economic losses on average every day.

The 2018 work report released by the Kaiping District People's Procuratorate pointed out that throughout 2018, more than 6,800 electricity-stealing devices, including Bitcoin mining machines, were seized in the district.

However, there are still people who take risks despite the severe crackdown.

In January 2019, Kaiping police released a document stating that someone at a pig farm in Kaiping District stole electricity to mine minerals, and the mine was built in a secret house under the pig shed.

In this house, 659 mining machines are densely stacked.

The mine hidden in the pigpen Source: Kaiping Police

"Up to now, those who used hundreds of mining machines to steal electricity have basically all been put in jail. But there are still some people in Kaiping who are stealing electricity for mining, some with as few as a few mining machines and some with dozens of machines," said Zhao Jianhua.

To this day, the crackdown on electricity theft is still ongoing in Kaiping District, Tangshan City.

Cases of stealing electricity for mining have been exposed from time to time across the country.

For example, at the end of December 2019, a major case of stealing electricity for mining in Zhenjiang was publicly tried. In less than two years, 10 people used nearly 4,000 mining machines to mine Bitcoin, stealing more than 13 million yuan in electricity.

In April 2020, a man was arrested by the police for allegedly stealing electricity to mine Bitcoin in Changfeng County, Hefei, Anhui. The amount involved in his case was 200,000 yuan.

This cat-and-mouse game is far from over.

*The interviewees in this article are pseudonyms.