On July 8, 2021, the Security Service of Ukraine announced that it had uncovered “a large mining farm” that was illegally using the city’s electric energy and seized its mining equipment, which, however, turned out to be PlayStation 4 Slim game consoles. On July 15, 2021, ММІ Engineering, which owned the seized equipment, commented on the situation. AIN.UA provides new details of this case.
What SSU says
According to the SSU, one of the former premises of Vinnytsiaoblenergo JSC allegedly mined cryptocurrency. According to the agency, almost 5,000 computer equipment pieces have been used on the farm. According to the preliminary report, the loss could have been between 5 and 7 million hryvnias a month.
Citizens of Kyiv and Vinnytsia created the farm, said the SSU. They used one of the former warehouses of Vinnytsiaoblenergo, located at the industrial site of the JSC, and illegally consumed electric energy from its networks. During the raid, 3,800 game consoles and over 500 video cards were taken from the premises.
You can see in official SBU pictures that the main ‘mining’ tools were PlayStation 4 Slim consoles. Indeed, you can mine the cryptocurrency with them, but it would make no profit. Better would be to use them for farming game resources and developing game characters.
What MMI Engineering says
Lawyers representing the Ukrainian company ММІ Engineering, which, as it turned out, was the subject of the SSU release, contacted the editorial board of AIN.UA. The company develops software, maintains networks, and trains AI. Maksym Boiko, a lawyer at Juscutum, who represents the company, noted that SSU officers provided untruthful information in the release, for example:
- The claim of the agency that the company’s activities were illegal and that it was taking energy from the city’s networks, and it could have left the citizens without light in their houses. According to the lawyers, ММІ Engineering concluded contracts with Vinnytsiaoblenergo and Enera Vinnytsia LLC for the energy supply; it pays the bills according to the contractual price stated in those bills. According to AIN.UA, agreements between such parties do really exist. But we could not get familiar with their text in detail.
- The company also has a lease agreement for premises at 6A Energetychna Street, where the search took place. This is the former premises of Vinnytsiaoblenergo, which is now owned by Alfa Energy (AIN.UA reviewed the real estate lease agreement).
Update as of July 16, 2021: At the request of AIN.UA, the company provided energy bills for Vinnytsiaoblenergo and Enera Vinnytsia, LLC (one company acts as a supplier of energy, the second – as the operator of the distribution system).
As MMI Engineering said, the calculation takes place according to the scheme: advance payment + at the beginning of the next month for the previous month. For example, for June 2021 the company paid Vinnytsaoblenergo (for distribution) 122,034.43 UAH, Vinnytsaoblenergo (for reactive power) 2,695.46 UAH, Enera Vinnytsa – 186,878.16 UAH. The total amount for the month including VAT: 311,608.05 UAH.
As AIN.UA learned, the search was conducted in connection with an investigation against officials of the Alpha Energy company: SSU officers suspected them of illegal mining. The ММІ Engineering company is not mentioned in the orders. MMI Engineering did not comment on what activity was run in the premises where the search took place and how was the seized equipment involved. The editor of AIN.UA awaits more details on this issue.
Vinnitsaoblenergo itself officially stated that no mining farms had ever functioned in these premises. And that the company’s specialists did not find any traces of illegal power extraction during the search:
“The specialists of our company together with representatives of the Department of the State Energy Inspection in the Vinnytsia region were involved as experts. During the inspection, representatives of the supervisory body did not reveal a single fact of electric energy theft. Therefore, information about multi-million electricity thefts does not correspond to reality,” said Vinnytsiaoblenergo.
Consequences of the search
MMI Engineering says that the search completely paralyzed its operations, that the seized equipment is worth about 30 million hryvnias, and that the company is trying to get it back. The search also caused problems with foreign investors – they doubt further investments and don’t want to risk (according to the state registers, the owner of ММІ Engineering is ZAFAR TECHNOLOGY from the UAE).
After the search, the premises look like this:
The company’s lawyers filed complaints about the illegal actions of the SSU to the Kyiv Pecherskyi District Court and the Prosecutor General’s Office of Ukraine.
AIN.UA will follow the progress of the situation.