Mysterious noises in an idle factory: 4,000 "mining machines" frantically mining Bitcoin

Many people suddenly came to the long-idle factory, and multiple monitoring devices were installed outside the factory. These factories were silent during the day, but at night there was a "buzzing" noise...

The bearing factory was filled with "iron cubes", and the mysterious noise at night caused discussion and panic among the villagers.

"Prosecutor Zhu, thank you for handling the case according to the law and helping us recover our losses!" Early in the morning of March 20, 2020, after receiving a follow-up call from Zhu Yongquan, director of the First Procuratorate of Dantu District Procuratorate of Zhenjiang City, Jiangsu Province, the head of the marketing department of Zhenjiang Power Supply Branch of State Grid Jiangsu Electric Power Co., Ltd. (hereinafter referred to as "Zhenjiang Power Supply Company") thanked Zhu Yongquan repeatedly and stated that the losses of more than 280 10KV medium-voltage lines used to power factories and mines in Zhenjiang City have all returned to normal range values.

The case mentioned by the person in charge is the theft case of Lan Liwei and 10 others handled by the Dantu District Procuratorate of Zhenjiang City. This case is the largest theft of electricity case in Jiangsu Province. Lan Liwei and 10 other criminals organized nearly 4,000 "mining machines" to frantically mine Bitcoin. In less than two years, the amount of electricity stolen was as high as more than 13 million yuan.

The case was prosecuted by the Dantu District Procuratorate of Zhenjiang City. The court later sentenced Lan Liwei and 10 other defendants to fixed-term imprisonment ranging from three to thirteen years for the crime of theft and imposed fines.

Strange roaring noise in the factory

An idle bearing factory in Dantu District, Zhenjiang City, has its doors closed all year round. Since March 2017, the factory area is still silent during the day, but at night, a "buzzing" noise can be heard from the dark factory.

This mysterious phenomenon is not an isolated case. It has also appeared in Zhenjiang New District and Xinfeng, Gaoqiao, Guyang and other places in Dantu District of Zhenjiang City. What exactly is this strange roar? It once caused discussion and panic among the villagers.

"At the end of 2018, our company inspected through the integrated power and line loss management system and found that the line loss rate of many 10kV lines in the eastern part of Zhenjiang had increased sharply. Then, through the power consumption information collection system and marketing business application system, we compared and analyzed the power load and power consumption of users on the suspected lines, and determined that many power users in Zhenjiang New District, Dantu District and other places were suspected of major power theft."

On March 13, 2019, the Dantu Branch of the Zhenjiang Public Security Bureau received a report from the Zhenjiang Power Supply Company, stating that there may be major electricity theft in Xinfeng and other towns in the Dantu District of the city.

The public security organs found that the high-voltage metering box of the circuit at the scene of the crime had been tampered with, resulting in a serious discrepancy between the power supply information held by the power supply department and the actual power loss. The public security organs followed the clues and found rows of neat "shelves" in an idle factory nearby. The "shelves" were filled with densely packed "iron cubes". Each "iron cube" was connected to the socket on the wiring board through wires and made a "buzzing" noise during operation. The scene in front of them looked very much like some scenes in the movie "The Matrix". In fact, these buzzing "iron cubes" are "mining machines" used to mine Bitcoin, and are also the source of the strange noise.

As a result, a major case of stealing electricity to mine Bitcoin came to light.

The gang's methods of committing crimes are very covert

"This gang's methods of committing crimes are very covert. Their main members are all from Zhejiang, and most of the hired personnel are from other places. They generally do not communicate with local people, and the surrounding people are not clear about what they are doing specifically. They also installed multiple surveillance devices around the factory, making it difficult for outsiders to approach..." In April 2019, the public security organs reported the relevant situation to the Dantu District Procuratorate of Zhenjiang City.

In view of the seriousness of the case and the high level of public attention, the Dantu District Procuratorate immediately assigned key personnel to intervene in advance in accordance with the law.

"Since the evidence of electricity theft at the scene can be quickly eliminated and the electricity meter can be restored to normal in an instant, it is extremely difficult to discover the specific electricity theft behavior of this criminal gang. The most important evidence for identifying this case is the electricity theft facilities. If the electricity theft cannot be discovered on the spot, it will be difficult to investigate and punish this gang..." At the case discussion meeting, prosecutors from the Dantu District Procuratorate put forward investigative suggestions from aspects such as "factory rental situation, personnel and financial transactions, and identification of suspects."

The public security organs quickly adjusted the direction of the investigation, quickly identified the identity of a major criminal suspect, and conducted analysis and judgment on this person's situation.

After nearly two months of meticulous investigation, the public security organs, in accordance with the suggestions of the procuratorate, went to banks, telecommunications companies, power supply companies, price bureaus, quality supervision departments and other departments for investigation and evidence collection, price verification and appraisal, communication and coordination. According to the law, they retrieved more than 500 account transactions of the persons involved in the case, tens of thousands of WeChat and text messages chat records, and factory lease contracts and other factual materials. Finally, they grasped the fact that a criminal gang with Lan Liwei and others as the main members rented 9 factories in Zhenjiang New District and Xinfeng, Guyang and other places in Dantu District of Zhenjiang City, installed "mining" equipment in batches, hired more than a dozen fellow Zhejiang natives and other outsiders, and committed the crime of stealing national electricity.

The shattered “pigtail dream”

Why did Lan Liwei and others risk going to jail just to "taste" free electricity? It all started with Bitcoin and Bitcoin "mining machines".

Bitcoin is a virtual encrypted digital currency that is not issued by a specific monetary institution, but is generated by the calculation of network nodes. It can be circulated all over the world and can be bought and sold on any computer connected to the Internet. No matter where you are, anyone can mine, buy, sell or receive Bitcoin. The biggest difference between Bitcoin and other virtual currencies is that its total number is very limited and it is extremely scarce. In December 2017, Bitcoin reached its historical high of $19,850 per coin.

Bitcoin "mining machines" are computers used to earn Bitcoin. These computers generally have professional "mining" chips, and most of them work by burning graphics cards. The so-called "mining" is actually everyone working together to solve the same math problem, which requires a certain amount of calculation to solve. The "miner" who can get the answer first can share the "Bitcoin" reward. Each "mining" device consumes up to 25-50 kWh of electricity per day due to different models, and all of them are industrial electricity. If you pay the electricity bill according to the standard of industrial electricity, you will not only not make money, but also lose money.

In order to reduce the high cost of mining, many miners take risks and choose to steal electricity for mining, and Lan Liwei is no exception.

In 2016, Lan Liwei, who was engaged in the cable recycling business, heard from a friend that Bitcoin "mining" was profitable and quick, so he bought 10 Bitcoin "mining machines" and hosted them at a hydropower station in Yunnan to "test the waters". In less than half a year, he made a net profit of nearly 20,000 yuan. The good times did not last long, and the dry season in the area forced Lan Liwei to migrate like a beekeeper.

In March 2017, Lan Liwei gathered more than a dozen people and came to Zhenjiang, Jiangsu Province. With the help of local villager Zhu Funian and others, they found a factory. By short-circuiting the transformers and other methods, they slowed down the meters in the distribution rooms at the "mining" equipment locations, thereby achieving the purpose of stealing electricity for "mining."

At first, Lan Liwei and his team only rented one or two factories, installed few mining equipment, and stole little electricity. At the end of 2018, as the price of Bitcoin continued to rise, Lan Liwei and his team increased their investment, renting idle factories far from residential areas and dusty areas in Zhenjiang New District and Dantu District, and placing nearly 4,000 mining equipment there.

Relying on these thousands of "mining" devices, Lan Liwei and others unscrupulously pursued their dream of getting rich by stealing national electricity to "mine" and earn Bitcoins.

On May 20, 2019, the public security organs organized more than 100 police officers to simultaneously launch arrest operations at nine previously identified "mining" equipment locations and four main suspects' residences. Lan Liwei and several other suspects were arrested on the spot, nearly 4,000 "mining" equipment were seized, and electricity theft facilities were seized on the spot. It is worth mentioning that just one day before being arrested by the public security organs, Lan Liwei and others traded more than 1 million yuan worth of Bitcoin through an overseas network platform.

Nearly 4,000 mining devices seized

In August 2019, the public security organs transferred the case involving Lan Liwei and 10 others on suspicion of theft to the Dantu District Procuratorate of Zhenjiang City for review and prosecution.

The court set up a case handling team consisting of the deputy chief prosecutor in charge and four business backbones. The case handling team reviewed all the materials in the case, such as bank account statements, WeChat, chat records, etc., and conducted multiple investigation experiments and communication consultations with the public security organs on issues such as the calculation of the amount of electricity theft. Based on the principle that doubts are in favor of the defendant, the case handling team finally determined that Lan Liwei was responsible for the total amount of more than 13.78 million yuan involved in the case because he participated in all the crimes; the amounts involved in the case of the other nine people ranged from more than 11.69 million yuan to more than 400,000 yuan.

"Prosecutor, I admit that I stole electricity, but I don't know exactly how much I stole. If you can tell me how such a high amount of theft was determined, I will be convinced and willing to compensate the power supply company for its losses." During the prosecution, Lan Liwei and others had no objection to the theft of electricity, but most of them had doubts about the determination of the amount of theft. The defense lawyer also held a general view on the determination of the amount of theft.

In order to urge the defendants to voluntarily confess and repent and compensate the victim unit for losses, the prosecutor explained in detail to Lan Liwei and others the method and standard for determining the amount of electricity stolen, and communicated with the defense lawyers one by one on the facts of the case, the amount of electricity stolen and the sentencing range, which eventually prompted Lan Liwei and others to all confess and accept punishment. Zhu Funian and other three defendants also voluntarily returned 1 million yuan of stolen money to the power company. The defense lawyers and the duty lawyers did not object to this, and witnessed Lan Liwei and others signing the confession and acceptance of punishment agreement on the spot.

After accurately defining the status and role of each person involved in the crime and comprehensively considering the sentencing circumstances such as confession and acceptance of guilt, on November 21, 2019, the Dantu District Procuratorate filed a public prosecution against Lan Liwei and 10 others on suspicion of theft.

On December 24, 2019, the court held a public trial of the case.

During the trial, neither the defendant nor the defense counsel had any objection to the more than 10 volumes of documentary evidence, witness testimony, the defendant's confession and defense, and the transcripts of investigation, examination, identification, and investigative experiments presented by the prosecutor in court.

"I have caused great losses to the country, brought irreparable harm to my family, and left an indelible bad influence on my children. I regret it very much. I have committed a crime and I plead guilty. But I am the pillar of the family. I have sick parents and young children at home. My wife cannot support me alone. I hope you can give full consideration and give me a lighter sentence..." At the trial, Lan Liwei and other defendants pleaded guilty and expressed remorse in court, and voluntarily returned the nearly 4,000 "mining machines" seized by the public security organs during the investigation stage and the 14 bitcoins held in the account as illegal gains to the Zhenjiang Power Supply Company.

After more than two hours of trial, the court adopted all the criminal facts and sentencing recommendations alleged by the prosecution, and made the above-mentioned judgment on Lan Liwei and 10 other defendants in court.

The reporter learned that, driven by this case, Zhenjiang Power Supply Company, in combination with the suggestions of the procuratorate, began to carry out a one-year special campaign to combat and rectify illegal and criminal acts of electricity theft in Zhenjiang City in June 2019. Taking the special campaign as an opportunity, it has formulated and improved long-term working mechanisms to combat electricity theft crimes, including real-time analysis of line losses, on-site inspections, routine tracking, and legal evidence collection, effectively safeguarding the company's legitimate business rights and interests, national economic interests, and social public security.

Post-case statement

Court trial

At present, the most valuable digital currency in the blockchain industry is Bitcoin, which is likened to digital gold. In September 2017, the national regulatory authorities issued a clear ban on the issuance and trading of virtual currencies in China, with the original intention of ending the continued spread of financial risks related to virtual currencies. However, some lawless elements saw the "business opportunity" and repeatedly took risks, eventually stepping into the abyss of crime.

In this case, criminals such as Lan Liwei could not resist the temptation of money and used illegal means to seek illegal profits and committed the crime of stealing electricity to earn Bitcoin. A Bitcoin mining machine can consume up to 40 degrees of electricity when it runs 24 hours a day. If an ordinary family of three uses 6 degrees of electricity a day, it is roughly estimated that the electricity consumption of the nearly 4,000 Bitcoin mining machines seized for one day is equivalent to the electricity consumption of more than 25,000 households a day. Lan Liwei and others not only illegally stole national electricity, but also may cause catastrophic fires due to short circuits, bringing immeasurable losses to innocent people.

The amount involved in this theft case was extremely huge, and it was also the largest theft case involving theft of electricity in Jiangsu Province's history. The successful handling of the case dealt a blow to the arrogance of criminals and maintained a fair and good order of electricity supply and use in society.

(Zhu Yongquan, Director of the First Procuratorial Department of the Dantu District People's Procuratorate of Zhenjiang City, Jiangsu Province)