Authorities seized a trove of over 2,000 illegally imported Bitmain ASIC cryptocurrency miners from a Russian mining operation earlier this month.
The founder of mining firm Intelion Mining, Alexander Shashkov, said that armed customs agents raided his company’s offices in two Russian cities, CoinDesk reports.
Shashkov, made the news public when speaking at the TerraCrypto cryptocurrency mining conference in Moscow on July 25.
Unfortunately for him, Shashkov was not aware the seized cryptocurrency miners were imported illegally. According to the report, the authorities went after the hardware when its owners failed to provide valid documentation.
Intelion Mining sells ASIC hardware and runs data centers where individuals can host their own miners. Many of the miners operating at Intelion’s locations are owned by its customers and not the company.
It seems the mining hardware was part of a batch of 6,012 ASIC machines that were imported to Russia between August 2017 and February 2018. The trove of miners included Bitmain‘s Antminer S9-13.5, L3+, D3, and power supplies for the machines.
According to a search warrant seen by CoinDesk, the hardware‘s importer, the Far-East Trading and Industrial Company (DPTK), failed to pay approximately $1.2 million worth of import duties on the miners.
“In an undefined time, but no later than August 8, 2017, [DTPK CEO] Artem Aleksandrovich Bublik … got involved in a criminal conspiracy with undefined individuals, the goal of the conspiracy being avoiding due customs fees in especially large amounts while importing into the Eurasian Economic Union of ASIC miners and power elements for ASIC miners,” the warrant is reported to state.
DPTK allegedly gave customs officers false documents for the miners which incorrectly stated the hardware‘s prices.
The importer also said it procured the machines from a Korean firm, via another intermediary based in Hong-Kong. Howecer, when customs contacted the Korean firm, it said it no longer did business with DPTK, its last contract was signed in 2012, and has since expired.
The confiscation of hardware certainly came as a shock to Intelion Mining and its customers. But if a government takes a disliking to, or finds reasons to remove hardware like this, it probably will.
Earlier this year, the Iranian government seized 1,000 Bitcoin miners that it claimed were illicitly using state subsidized electricity.