About 600 computers used to mine bitcoin and other cryptocurrencies have been stolen from data centers in Iceland in what police said was the biggest series of thefts ever in the North Atlantic island nation.
About 11 people have been arrested, including a security guard, in what Icelandic media have dubbed the “Big Bitcoin Heist.”
A judge at the Reykjanes District Court on Friday ordered two people to remain in custody.
The powerful computers, which have not yet been found, are worth almost US$2 million.
However, if the stolen equipment is used for its original purpose — to create new bitcoins — the thieves could turn a massive profit in an untraceable currency without ever selling the items.
“This is a grand theft on a scale unseen before,” said Olafur Helgi Kjartansson, the police commissioner on the southwestern Reykjanes peninsula, where two of the burglaries took place. “Everything points to this being a highly organized crime.”
Three of four burglaries took place in December last year and a fourth took place in January, but authorities did not make the news public earlier in hopes of tracking down the thieves.
Bitcoin has been hugely volatile, posting some dizzying intraday rises and falls over the past year. The price of a single bitcoin rocketed to nearly US$20,000 late last year and then plunged early this year.
On Friday, it was trading at just less than US$11,000.
Bitcoin and other cryptocurrencies rely on the blockchain, the name given to the public, distributed ledgers that track ownership.
The bitcoin ledger is powered by miners, so-called because they throw computational power into the system, occasionally receiving — or mining — new bitcoins in return.
Drumming up that computational power usually means lots of computers — and lots of electricity.
That desire for energy has created a gold rush for bitcoin in Iceland. Traders searching for cheap, renewable energy have been flooding into the island over the past few months to take advantage of its geothermal and hydroelectric power plants.
Unusually high energy usage might reveal the whereabouts of the illegal bitcoin operation.
Authorities this week called on local Internet providers, electricians and storage space units to report any unusual requests for power.
On Friday, Bank of England Governor Mark Carney launched a withering attack on cryptocurrencies, such as bitcoin, and urged regulators around the world to monitor them in the same way as other financial assets.
In a speech to the Scottish Economics Conference, Carney said a “global speculative mania” has “encouraged a proliferation of new cryptocurrencies,” adding that they should be held to the “same standards” as the rest of the financial system.
“Being part of the financial system brings enormous privileges, but with them great responsibilities,” Carney said.
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