Rogue Russian Bitcoin Miner Fined $7,000 for Using Government-Owned Supercomputer

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A man named Denis Baykov has been fined 450,000 rubles ($7,000) by Russian authorities after illegally mining Bitcoin (BTC) by using electricity from an old Russian nuclear warhead facility at Sarov, a small town in western Russia.

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The idea of using free electricity from government facilities to mine BTC is nothing new. Back in August this year, a case of a man using power from a Ukrainian nuclear power plant also surfaced.

Baykov, along with two other accomplices attempted to use the facility’s supercomputer that can clock speeds up to 1 petaflop (1,000 trillion transactions per second) as a Bitcoin mining machine. Currently, it is not yet clear how many BTC were mined at the facility since officials seem to be only concerned with the amount of electricity stolen than anything else.

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The facility, All-Russian Scientific Research Institute of Experimental Physics (VNIIEhF), is a Stalin-era facility in Sarov, Nizhny Novgorod Region established in 1946. It was initially called the KB-11 and sometimes referred to as the Arzamas-16 facility. Since the late 1940s and through the dissolution of the Soviet Union, the facility has found use as a nuclear weapons research facility and hence remains a high-security area.

Baykov was arrested last year when the incident made international headlines. This is primarily because of the significance of the VNIIEhF facility as being the place where the first atomic bomb for the Soviet Union was developed.

Those involved in the theft were caught when the supercomputer at VNIIEhF was connected to the internet in order to submit the proof-of-work (PoW) hashed data to collect the Bitcoin block rewards. When the incident came to light, the culprits were handed over to the Russian Federal Security Service, according to Tatyana Zalesskaya, the official spokesperson of the institute.

Generally, the facility is kept locked up with restricted or limited access for the public or press, and is guarded around the clock and fenced off. Baykov and his associates were employees at the facility where they were tasked with the maintaining its general upkeep.

Do you think a fine of $7,000 is sufficient considering the scale of the crime? Do you think stealing company resources to mine Bitcoin (BTC) is more common than people think? Let’s hear your thoughts in the comments below!

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After obtaining a Masters degree in Regenerative Medicine, Daniel pivoted to the frontier field of blockchain technology, where he began to absorb anything and everything he could on the subject. Daniel has been bullish on Bitcoin since before it was cool, and continues to be so despite any evidence to the contrary. Nowadays, Daniel works in the blockchain space full time, as both a copywriter and blockchain marketer.

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