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Bitcoin

The big bitcoin heist: 600 powerful computers worth US$2 million stolen from Iceland centres

Police arrested 11 people, including a security guard, as they continue to search for the powerful machines, which if used for cryptocurrency mining could turn a massive profit

PUBLISHED : Saturday, 03 March, 2018, 5:01pm
UPDATED : Saturday, 03 March, 2018, 10:22pm

Some 600 computers used to “mine” bitcoin and other virtual currencies have been stolen from data centres in Iceland in what police say is the biggest series of thefts ever in the North Atlantic island nation.

Some 11 people were arrested, including a security guard, in what Icelandic media have dubbed the “big bitcoin heist”. A judge at the Reykjanes District Court on Friday ordered two people to remain in custody.

The powerful computers, which have not yet been found, are worth almost US$2 million. But if the stolen equipment is used for its original purpose – to create new bitcoin – the thieves could turn a massive profit in an untraceable currency without ever selling the items.

“This is a grand theft on a scale unseen before,” said Olafur Helgi Kjartansson, the police commissioner on the southwestern Reykjanes peninsula, where two of the burglaries took place. “Everything points to this being a highly organised crime”.

Three of four burglaries took place in December and a fourth took place in January, but authorities did not make the news public earlier in hopes of tracking down the thieves.

Bitcoin is a kind of digital currency that is not tied to a bank or a government. It has been hugely volatile, posting some dizzying intraday rises and falls over the past year or so. The price of a single bitcoin rocketed to nearly US$20,000 late last year and then plunged early this year. On Friday, it was trading just below the US$11,000 mark.

Bitcoin and other cryptocurrencies rely on the blockchain, the name given to the public, distributed ledgers which track the coins’ ownership. The bitcoin ledger is powered by “miners”, so-called because they throw computational power into the system, occasionally receiving – or “mining” – new bitcoin in return. Drumming up that computational power usually means lots of computers – and thus lots of electricity.

That desire for energy has created a gold rush for bitcoin in Iceland. Traders searching for cheap, renewable energy have been flooding into the island in recent months to take advantage of its geothermal and hydroelectric power plants.

Police tracking the stolen computers are monitoring electric consumption across the country in hopes the thieves will show their hand, according to an industry source who spoke on condition of anonymity because he is not allowed to speak to the media.

Unusually high energy usage might reveal the whereabouts of the illegal bitcoin mine.

Authorities this week called on local internet providers, electricians and storage space units to report any unusual requests for power.

In Edinburgh on Friday, Bank of England Governor Mark Carney launched a withering attack on cryptocurrencies, such as bitcoin, and urged regulators around the world to monitor them in the same way as other financial assets.

In a speech to the Scottish Economics conference, Carney said a “global speculative mania” has “encouraged a proliferation of new cryptocurrencies” and said they should be held to the “same standards” as the rest of the financial system.

“Being part of the financial system brings enormous privileges, but with them great responsibilities,” Carney said.