Crypto-mining church in Russia fined for excessive energy use

A Protestant church from the city of Irkutsk in Russia has been court-ordered to pay a fine of 1.1 million rubles ($16,600) after it was discovered to have been consuming large amounts of electricity for its cryptocurrency mining operations.

According to Russian news outlet RT, local utility company Irkutskenergo reported a sudden spike in the electricity consumption of the ‘Grace’ evangelical community in May 2017, reaching 2 million kWh through August. Church trustees told the utility provider that the energy was used for heating as well as to power the printing machine to copy religious materials. Inspectors from Irkutskenergo visited the building rented out to the church, and in it, they discovered a server room on the second floor, which they determined was being used to mine cryptocurrencies.

This resulted in the utility company to charge the church the same rates applicable to corporations and industrial enterprises due to ‘Grace’s’ “excessive power consumption.”

The organization, however, took the matter to court, asking for a refund of the surcharge totalling 1.1 million rubles. However, the Irkutsk Arbitration Court turned down the church’s request and instead, ordered ‘Grace’ to pay up.

In its ruling, the court noted that the energy spike happened during the summer season, and also compared the energy used ‘Grace’ with data from larger temples and printing houses in Russia. Ultimately, the judge ruled that the amount the church paid to the authorities was reasonable.

The eastern parts of Europe have seen significant numbers of home crypto mining in the last few years. This is because the region enjoys preferentially subsidized electricity rates. According to local reports, private residents and other categories of consumers pay 1.22 rubles per kWh ($0.018) during the day and 0.70 rubles ($0.010) at night, so it’s no surprise that enterprising individuals and organizations like ‘Grace’ may have been taking advantage of the cheap electrify to earn extra income.

The recent court ruling, however, could change how authorities in Russia and the surrounding areas will be handle home-based crypto mining activities. Similar to ‘Grace’s’ case, other utility companies could start charging home crypto miners the same electricity rates as those paid by industries and big organizations.

Countries with favorable electricity prices have had to take a stand to control crypto mining activities and electricity consumption. Many have taken action against miners for stealing electricity. Recently, a miner in China was charged with mining cryptocurrency using stolen electricity. The court sentenced him to three years and six months in prison for his actions.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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Russian crypto exchange YoBit advertises pump scheme

Russia-based cryptocurrency exchange YoBit has announced a scheduled pumping of coins selected at random.

In its tweet, YoBit gave no specific reasons for its action, wherein “we will buy one random coin for 1 btc every 1-2 mins 10 times (total buy amount – 10 btc).” The exchange, which lists thousands of altcoins, also provided a timer 22 hours prior to the trades. As of this writing, there are six hours left before execution of the scheme.

We can only wait to see the effect on whatever coins are selected, but the tweet is notable for its unusual nature. Usually, when an asset is bought in the hopes of spurring demand from other investors, it is done more discreetly, so as to sell at a peak.

Last February, the U.S. Commodity Futures Trading Commission (CFTC), which has classified cryptocurrencies as commodities under its jurisdiction, had already warned the public of pump-and-dump scams, saying, “As with many online frauds, this type of scam is not new-it simply deploys an emerging technology to capitalize on public interest in digital assets.” It remains to be seen, however, how regulatory agencies will react, given the forthrightness of the exchange.

Commenters on the YoBit tweet expressed disbelief, amusement, and outrage, as well as cluelessness. Several users on reddit have confirmed the existence of e-mails sent by the company, with address news-mailer@yobit.net, indicating that the exchange had not been hacked.

Already, trading platform Coinigy has tweeted its plan to delist YoBit from its network of cryptocurrency exchanges, “due to overwhelming negative experiences as documented on social media and forums, among other reasons.” However, it said it would be “asking for feedback first. As a popular platform in the crypto trading space, it is essential for us to be diligent and not promote sites that may harm our users.”

YoBit has been operating since 2015.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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Russian removes cryptocurrency from draft bill

Russia has been undergoing a lot of experiments with crypto lately, both physically and theoretically. Most recently, it completed its own initial coin offering (ICO), which was a reportedly a huge success. The amount of time, money and resources allocated to the space makes the latest announcement puzzling. The country has reportedly scrubbed every mention of cryptocurrency and crypto-related terminology from its legal doctrine. This is the exact opposite direction that most within the crypto industry had been anticipating.

This past July, a regulatory framework for crypto was submitted to Russia’s lower house of parliament, or Duma. That framework came from an order by President Putin, who is known for getting what he wants. However, legislators were not able to coordinate their efforts and began to trip over each other, leading to delays.

Lawmakers now say that they hope to have a new framework for “digital financial assets” ready by the fall and hope to receive approval by the end of the year. Until that happens, the word “cryptocurrency” has been removed from the legal lexicon by lawyers, as there is now no clear definition of what it means.

In the meantime, cryptocurrency is going to be nothing more than the issuance of digital tokens in exchange for capital investments – basically, an initial coin offering (ICO). Russian citizens can still buy, sell and trade digital assets and trading platforms continue to multiple across the country.

Crypto can also be exchanged for rubles without fear of the hammer being dropped. Funds can be received directly into trades’ bank accounts, as well as crypto and fiat wallets. A new-ish service, Best Change, offers investors the ability to obtain the best exchange rates for their assets by listing verified online exchanges that can accept the requested transactions.

In an effort to assist with the development of the legal framework, Russia’s Federal Financial Monitoring Service has commissioned a study that will hopefully provide a detailed analysis of all the cryptocurrency transactions that have been conducted. It will store and provide specific details on crypto transactions – mostly Bitcoin Core – and the wallet addresses associated with the transactions. The study is expected to be completed by the end of the year and will not only help shape the legislation landscape, but also provide information that could help control financial fraud.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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Police crack down on crypto ATMs across Russia

Cryptocurrency and blockchain technology have been making steady advancements into the mainstream market in many countries around the world, but apparently, this was not the case in Russia. According to local media reports, Russian police have seized no less than 22 automated teller machines (ATMs) selling cryptocurrency in several cities in Russia last week. Operated by the Bbfpro company, the machines were located in shopping malls, restaurants and stores in nine different Russian cities, Russian news outlet RBC reported, quoting Digital Rights Center lawyer Sarkis Darbinyan. In a separate interview with Russian media outlets, Bbfpro manager Artem Bedarev claimed there was no notice from the Russian authorities prior to the crackdown, noting that the investigation would continue for at least another six months. The machines would not be returned to Bbfpro while the investigation is ongoing. The operation was ordered by the Prosecutor’s General Office, acting on a request from the Central Bank of Russia (CBR), a government agent told local media outlets. A CBR officer, who declined to comment on the crypto ATM seizures, noted that the government agency conducts “systematic work to identify and counteract illegal activities in the financial market,” particularly since there is a high chance that uncontrolled cross-border fund transfers and cash outs involving cryptocurrencies can happen. Darbinyan, however, pointed out that the Russian Federation’s current laws do not prohibit citizens from acquiring cryptocurrencies. Bbfpro, for its part, has been observing all legal procedures, paying its taxes, and verifying the identity of its customers even without prompt from the government. Bbfpro plans to appeal the seizure operation, according to the lawyer. On its website, Bbfpro said its machines support purchases of cryptocurrencies like BTC. The company works with crypto exchange Exmo, offering technical support for the ATMs. According to Bbfpro, installing one terminal costs 155,000 rubles ($2,300). It charges 1 percent on the registered turnover, which is considerably less than other crypto ATMs in other countries. For example in Malta, ATM operators charge no less than 8% on each transaction.
Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
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