Russian Crypto Mining Fraudster Jailed for Four Years
A Russian man has been sent to prison for four years for crypto mining-related fraud.
Per the media outlet 56 Orb, the man is a 47-year-old resident of Orenburg, a southwestern city near Russia’s border with Kazakhstan.
A court in the city heard that the man duped a local entrepreneur into investing in a crypto mining project. The man told the entrepreneur that he intended to “buy a range of equipment for cryptocurrency mining.”
The man offered the entrepreneur the opportunity to work as partners. He said the project could accrue considerable profits by buying and reselling crypto-mining hardware to would-be miners.
Many crypto miners are believed to be active in the Russian southwest, an area famous for its low energy prices. Industrial crypto mining has also grown into a large business sector across the border in Kazakhstan.
Top 3 countries in #Bitcoin mining and their hash rates— Lil Morrison (@LillyMoCrypto) January 24, 2023
United States: 35.4%
The entrepreneur gave the man some $108,000 of his own money to invest in the project. A company the entrepreneur had founded also invested around $172,000 in the man’s mining initiative.
But, the court heard, the man failed to deliver on any of his promises. He delivered no crypto mining equipment and failed to refund the entrepreneur – leaving the entrepreneur and his company out of pocket.
The man had pleaded not guilty, and told the court that he had “no intention” of deceiving the entrepreneur.
But the court ruled otherwise, finding him guilty of two counts of fraud.
Russian Crypto Mining Fraudster Jailed – and Ordered to Pay Compensation
In addition to a four-year jail term, the man was ordered to compensate the entrepreneur and his firm in full – and pay a fine of just under $4,300.
Crypto mining has become an increasingly hot issue in Russia.
And the often-volatile value of mining equipment has led some individuals to crime. In 2021, three individuals were arrested for scaling their neighbor’s balcony to break into his apartment and steal 30 video cards from his mining rigs.
Some parts of the country, such as Irkutsk, are becoming mining hotspots. And Russian energy firms are keen to launch gas-powered crypto mining projects at a number of oil drilling sites.