Ukrainian oligarch is mining Bitcoin

[hatshepsut93]

These news aren't on any English-written media yet, so I'll drop the google translate link to the original: https://www-pravda-com-ua.translate.goog/news/2021/12/10/7316898/?_x_tr_sl=auto&_x_tr_tl=en&_x_tr_hl=uk

The journalists found a lot of details about this operation, mainly the shipments of ASICs (5558 units of Bitfury B8 and 14468 units of Antiminer S9) and the purchase of electricity on an auction, which is suggested to be corrupt, as the price is below the typical market value for industrial use. The farm, which is located in Kolomoyskiy's steel factory, is estimated to be making 80 BTC per month. And since Ukraine still doesn't have working crypto regulation, the oligarch could be easily not paying any taxes on his profits, on top of getting unfairly cheap electricity.

Interestingly, this is not his first time setting up this kind of operation, as he already done the same thing in the US last year.


I personally don't think that this has any implications for Bitcoin, in Ukraine or globally, it's just curious to see how these boomer oligarchs are surprisingly savvy enough to recognize an opportunity for profit and quickly set up a large scale mining farm. It's probably no coincidence that it happened this year, after China banned Bitcoin, so Kolomoyskyi probably got a good deal on those ASICs. Maybe this isn't the adoption that we want or need, but it's still adoption.

[Rruchi man]

I personally don't think that this has any implications for Bitcoin, in Ukraine or globally, it's just curious to see how these boomer oligarchs are surprisingly savvy enough to recognize an opportunity for profit and quickly set up a large scale mining farm.

This is a perfect representation of someone or people in power who are smart money making individuals, taking full advantage of both the free and friendly crypto environment in Ukraine, buying hardwares and getting good electricity to power his or their operations at good cost. I sincerely doubt that Ukraine will remain without crypto regulations forever, we may begin to see new crypto regulations in the country soon, maybe in the coming year especially since reports of activities like this are now surfacing.

[hatshepsut93]

This is a perfect representation of someone or people in power who are smart money making individuals, taking full advantage of both the free and friendly crypto environment in Ukraine, buying hardwares and getting good electricity to power his or their operations at good cost.

He is not some genius entrepreneur with fantastic business sense, he is mainly leveraging his money and influence to steal from the government and by extension from the people. Like I said, he won a most likely rigged auction for that electricity, and he will very likely not pay any taxes on his Bitcoin profits. This is the man who moved a ton of money out of the largest bank of Ukraine, nearly bankrupting it if not for government interference, and currently he succesfully evades FBI who has a lot of questions about his activities in the US.

This is a net negative for the free market, because honest miners who buy electricity fairly and pay their taxes can't compete with people like him.

[romero121]

Mining bitcoin has turned to be a big business. It is a known fact, when one leaves the network someone else takes the place. This is getting proved through this incident of a massive shipment of mining hardware. Several countries are getting into cryptocurrency mining. Recent day El Salvador have taken a big step forward, with Ukraine there is no specific data on the same. However this could set as a initial point for more people into mining.

[Lucius]

Man is just taking advantage of a system that is more than obviously full of holes and corrupt to the core, but that is the reality of a country like Ukraine. The country has been in a very difficult situation for several years, and now there is a lot of talk about a new military conflict given what is happening on their eastern border.

I think there are a lot of things like that in countries like Ukraine, especially Russia, Belarus, Uzbekistan, Kazakhstan - and I wouldn't be surprised if the situation is better in Romania or Bulgaria and even further west in the Balkans. I am thinking in particular of the theft of electricity used for crypto mining.

Last week, electricity distribution company CEZ Distribution Bulgaria, a subsidiary of Czech CEZ, disclosed an illegal facility where dozens of computers were used to mine cryptocurrency powered by electricity stolen from the network. The Prosecutor’s Office and the Bulgarian Interior Ministry are continuing the investigation into the large theft of electricity in the Sofia village of Herakovo.

Local Prosecutor Plamen Petkov said that the offenders used over 500 computers to mine cryptocurrency, located in two halls, and the entire power supply was from the illegal connection to the network. No arrests have been made so far. The prosecution said they could not yet assess whether it was an organized crime group.

[hugeblack]

I do not think that someone who bought all these devices and bought the land and electricity costs would be with the aim of evading taxes, we are talking about an income of about half a million dollars a month or 6 million dollars a year, and with the possibility of an increase in the price of bitcoin, this income may easily double within a short period.

Perhaps someone who has enough experience has transferred his equipment from China to another country, but the government’s regulation of such business will be easy because it is easy to track the average consumption of electricity or who buys solar energy devices in large quantities, so the role of regulation, and imposing taxes will not be difficult.

[Fesatmas]

What about the injured party now? do they still accept cheap payments? or even volunteering to help the mining process without thinking that what is produced has a large value / 1 Month produces 80 Btc makes us wonder when the policy is not yet fully in place and implemented. So these activities are quite difficult to follow up, except in Kolomoyskyi no one really cares about Bitcoin. If this got out to the media, it would be a pretty scary thing for us to hear.

[hatshepsut93]

I do not think that someone who bought all these devices and bought the land and electricity costs would be with the aim of evading taxes, we are talking about an income of about half a million dollars a month or 6 million dollars a year, and with the possibility of an increase in the price of bitcoin, this income may easily double within a short period.

Perhaps someone who has enough experience has transferred his equipment from China to another country, but the government’s regulation of such business will be easy because it is easy to track the average consumption of electricity or who buys solar energy devices in large quantities, so the role of regulation, and imposing taxes will not be difficult.

He can avoid paying taxes by selling the coins on OTC exchanges and withdrawing USD to his offshore accounts. This man isn't just "big businessman", in Ukraine people like him take every legal and illegal advantage they can get to fill their pockets even more, despite already being billionaires. And they have influence to get away with it rather easily all the time.

[DaveF]

IMO we are going to see a lot more of this. Not because it's a new thing, but because it's being talked about more and more.
When nobody heard of crypto / BTC there were still a lot of people doing it and doing it in ways that may or may not have been 100% legit. Stealing electric, mining on hacked PCs, and so on.

I see it the same way we used to see a lot of marijuana growing places that were stealing electricity from nearby houses / businesses or setting up in abandoned buildings. Now that is, at least in the USA, not as big a deal with major business coming into it we see that less and less. Substitute BTC for marijuana and we are now seeing the same thing.

-Dave

[bL4nkcode]

[...] The farm, which is located in Kolomoyskiy's steel factory, is estimated to be making 80 BTC per month. And since Ukraine still doesn't have working crypto regulation, the oligarch could be easily not paying any taxes on his profits, on top of getting unfairly cheap electricity.
[...]
I personally don't think that this has any implications for Bitcoin, in Ukraine or globally, it's just curious to see how these boomer oligarchs are surprisingly savvy enough to recognize an opportunity for profit and quickly set up a large scale mining farm. It's probably no coincidence that it happened this year, after China banned Bitcoin, so Kolomoyskyi probably got a good deal on those ASICs. Maybe this isn't the adoption that we want or need, but it's still adoption.

Well, oligarchs will be of course always be involved on this type of business especially if there's no tax or lesser tax to pay from their side.

I have also thoughts that there are lots of them running such business everywhere in the world where crypto is not yet regulated and not yet banned since it will benefit them a lot, just not yet revealed.

[SquirrelJulietGarden]

I personally don't think that this has any implications for Bitcoin, in Ukraine or globally, it's just curious to see how these boomer oligarchs are surprisingly savvy enough to recognize an opportunity for profit and quickly set up a large scale mining farm. It's probably no coincidence that it happened this year, after China banned Bitcoin, so Kolomoyskyi probably got a good deal on those ASICs. Maybe this isn't the adoption that we want or need, but it's still adoption.

If China where with dominant hashrate for Bitcoin network can not be issue. Government want to crack down mining activities their because of their energy shortage. Miners and mining companies move to beyond China mainland.

Fortunately after all Bitcoin network is fine and still healthy. It even has a higher high, recently.

Ukraina is not a big nation in Bitcoin mining like China, so if there are any effects that should be smaller than China crackdown months ago.

[DeathAngel]

It’s further proof that bitcoin is the future of finance. These kind of people don’t make any bad decisions in finance.  Follow the money guys

[Fortify]

These news aren't on any English-written media yet, so I'll drop the google translate link to the original: https://www-pravda-com-ua.translate.goog/news/2021/12/10/7316898/?_x_tr_sl=auto&_x_tr_tl=en&_x_tr_hl=uk

The journalists found a lot of details about this operation, mainly the shipments of ASICs (5558 units of Bitfury B8 and 14468 units of Antiminer S9) and the purchase of electricity on an auction, which is suggested to be corrupt, as the price is below the typical market value for industrial use. The farm, which is located in Kolomoyskiy's steel factory, is estimated to be making 80 BTC per month. And since Ukraine still doesn't have working crypto regulation, the oligarch could be easily not paying any taxes on his profits, on top of getting unfairly cheap electricity.

Interestingly, this is not his first time setting up this kind of operation, as he already done the same thing in the US last year.


I personally don't think that this has any implications for Bitcoin, in Ukraine or globally, it's just curious to see how these boomer oligarchs are surprisingly savvy enough to recognize an opportunity for profit and quickly set up a large scale mining farm. It's probably no coincidence that it happened this year, after China banned Bitcoin, so Kolomoyskyi probably got a good deal on those ASICs. Maybe this isn't the adoption that we want or need, but it's still adoption.

It does sound like sheer corruption, some oligarch has found a cheap way to source electricity and is going all-in to drain it as much as possible. Probably power that has been assigned especially for steel production that is now getting siphoned off to benefit this single individual. The leadership in Ukraine really need to come down hard on these sort of "businessmen" and seize as many of their assets as possible, the last thing they should accept is the country sliding back to what it was before the last president with his huge private palaces. These individuals are a blight on every society on which they prey - contributing very little while sapping as much public money as possible.

[savetheFORUM]

I personally don't think that this has any implications for Bitcoin, in Ukraine or globally, it's just curious to see how these boomer oligarchs are surprisingly savvy enough to recognize an opportunity for profit and quickly set up a large scale mining farm. It's probably no coincidence that it happened this year, after China banned Bitcoin, so Kolomoyskyi probably got a good deal on those ASICs. Maybe this isn't the adoption that we want or need, but it's still adoption.

Well, this is a totally different story. Before we just hear that there are people in power who are investing in Bitcoin, but we never get to hear that there are people who are mining bitcoin. Anyways, I would say that they are pretty smart to discover an opportunity like this and get on it before it is too late.

The country might decide to set a regulation for cryptocurrency and we don’t know what it is going to be if they should decide to so in the nearest future. But before that, these people have already made a good level of income and if the regulation should even be against them, they might have covered up for everything by then.

[icopress]

It’s further proof that bitcoin is the future of finance. These kind of people don’t make any bad decisions in finance.  Follow the money guys

If you did not mindlessly write one-line messages, but delved into what the OP wrote and after that figure out the situation, you would understand that this news does not correspond to reality. People like Kolomoisky are tantamount to cancer because his entire business was built on shady deals in the 90s. 

He and other oligarchs who are mentioned in this news many years ago forcibly took away a controlling stake in UkrEnergo and other similar enterprises, through which these guys have been enriching themselves for many years. And even after they turned their gaze towards cryptocurrency, they still remain scammers ... I strongly doubt that in the long term this will benefit the adoption of bitcoins.