Categories: Bitcoin Business

Authorities Bust Illegal Crypto-Mining Lab In Nuclear Power Plant

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Ukrainian news media is reporting that last month an illegal cryptocurrency mining operation was discovered and confiscated on the site of a state-owned nuclear power plant in southern Ukraine. On July 10th Ukranian law enforcement and counterintelligence agencies discovered crypto mining equipment in a single office of the Yuzhnoukrainsk power plant run by the National Nuclear Energy Generating Company of Ukraine (known as Energoatom).

The Security Service of Ukraine (SBU) has arrested operators from the power plant for carrying out the crypto mining, compromising the plant’s security with their mining operation’s internet connection, and reportedly even leaking classified information about the plant’s physical security. The discovery of this operation and its aftermath is made especially troubling by the fact the nuclear plant itself is a state secret and the entrance of any computer equipment from outside the operation is strictly prohibited.

The equipment was discovered and confiscated in two separate seizures. Among the equipment confiscated by the SBU, according to reporting by CoinDesk, were “six Radeon RX 470 GPU video cards, a motherboard, power supplies and extension cords, a USB and hard drive, and cooling units installed in the South Ukrainian Nuclear Power Plant.” The report goes onto say that “all of the equipment was located in a single office, No. 104, in the administrative wing separate from the power facility.”

In a separate confiscation made on the same day, a branch of the National Guard of Ukraine “uncovered additional crypto mining equipment at the same nuclear plant,” says CoinDesk. “In this search and seizure, 16 GPU video cards, 7 hard drives, 2 solid-state drives and router were uncovered.” Related: Oil Prices Plunge As China Retaliates With Tariffs On U.S. Goods

Cryptocurrency mining, or crypto mining for short, is a process in which high powered computers perform extremely complex computational math in order to verify cryptocurrency transactions and add them to the blockchain digital ledger. Every time a cryptocurrency transaction takes place, a bitcoin miner must check the validity of the transaction and then update the blockchain. “The mining process itself involves competing with other cryptominers to solve complicated mathematical problems with cryptographic hash functions that are associated with a block containing the transaction data,” explains Webopedia. The trade is a competitive one because “the first cryptocurrency miner to crack the code is rewarded by being able to authorize the transaction, and in return for the service provided, cryptominers earn small amounts of cryptocurrency of their own. In order to be competitive with other cryptominers, though, a cryptocurrency miner needs a computer with specialized hardware.”

As Investopedia further explains, “The result of ‘bitcoin mining’”--another name for the process derived from the most famous form of cryptocurrency Bitcoin, “is twofold. First, when computers solve these complex math problems on the bitcoin network, they produce new bitcoin, not unlike when a mining operation extracts gold from the ground. And second, by solving computational math problems, bitcoin miners make the bitcoin payment network trustworthy and secure, by verifying its transaction information.”

Amazingly, this is not the first time that nuclear plant workers have been arrested for moonlighting as crypto miners. Apparently, the lure of nuclear plants’ ultra-powerful computers can simply be too tempting for crypto-savvy nuclear engineers. According to reporting from Cointelegraph, early last year “Several engineers at the Russian Federal Nuclear Center [were] arrested for attempting to use one of Russia’s largest supercomputers for Bitcoin (BTC) mining.” The miners were caught when they tried to connect the supercomputer, kept disconnected for security reasons, online, attracting attention. Related: Investors Are Ditching High-Yield Shale Bonds

Unfortunately, Ukraine did not learn from its neighboring country’s mistakes, nor its success in shutting down the operation before the secrecy of the plant’s security systems were seriously compromised. Now, after managing to keep the story from emerging for well over a month after the discovery and subsequent confiscations occurred, the Ukrainian police force is declining to comment on any of the breaking reports this week.

For those who have been paying attention to security at Energoatom’s facilities, however, this breach may not come as such a surprise. Back in 2017 activists called attention to the issue, with the Ukrainian Cyber Alliance uniting on Twitter to raise awareness.

It goes without saying that a nuclear power plant is one of the very last places--if not the last--that security should be lax, and the discovery of infiltration should raise alarms not just in Ukraine but in the nuclear energy industry as a whole. With such volatile and vulnerable substances, the potential for tragedy is hard to even comprehend.

By Haley Zaremba for Oilprice.com

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