Crypto Mining Operation Scam Revealed, Charges Filed By DoJ 

Attempting crypto-mining operations in the school is becoming common nowadays. The United States Department of Justice (DoJ) uncovered many of such cases. Recently, the DoJ filed charges against senior staff members of the Patterson Joint Unified School District. The two senior staff including Jeffrey Menge and Eric Drabert addressed attempting crypto mining operations in the premises of 10 district schools.   

The Crypto Mining Fraud  

Crypto mining is the approach of validating the facts in a blockchain by creating a cryptographic solution. The process requires a high amount of energy and mining resources and in return, the miners are provided with rewards in the form of tokens.  

To earn tokens, two senior staff of the school attempted crypto mining operations from over 10 district school premises. They were using the school resources and enhanced electricity costs for mining coins and transferring the rewards to their crypto wallets. 

Eric Drabert is the IT director whereas Jeffrey Menge is the assistant superintendent and chief business officer of the school. High energy consumption seeks the attention of the authorities towards the scam.  

Mining operations require a high amount of energy. As per Coingecko data, around 266,000 kilowatt-hours which is equal to 7 years of continuous electricity is consumed in mining a single Bitcoin. 

According to DoJ, both the members, bought high-end graphic cards and installed the same on school property to develop a crypto mining setup. However, detailed facts about the scam have not been revealed yet, but it is expected that Bitcoin (BTC), Dogecoin (DOGE), Monero (XMR), and Ravecoin (RVN) will be mined. 

Furthermore, Menge stole over $1 Million and $1.5 Million whereas Drabert made around $250K and $300K during the fraud, confirmed DoJ.  

How Regulatory is Handling the Situation

The case of crypto mining on the school premises is not new. In August 2023, two individuals were arrested for stealing around $1.5 Million in electricity from Cohasset High School. The fraud was confirmed by Bulgarian law enforcement agents. 

The scam took place between April 28 and December 14, 2021, and the miner was addressed stealing electricity worth $17,492.57 to operate the mining system. 

Keeping all these scenarios in mind, The DoJ and the United States Department of Energy (DOE) come up with a few of the rules for crypto miners. As per the new rule, crypto miners should report the energy utilization for six months. The initiative will help government bodies examine and understand the energy consumption in mining operations.   

The thing is that despite the growth of the cryptocurrency industry, high energy consumption is affecting the environment adversely. 

To work on the concern, the US Energy Information Administration (EIA) planned a survey. The survey will help the regulators in investigating and recording the energy usage by the local mining companies. Miners are required to provide information linked to energy usage. Investigating the details will help EIA understand energy consumption.        

Steefan George is a crypto and blockchain enthusiast, with a remarkable grasp on market and technology. Having a graduate degree in computer science and an MBA in BFSI, he is an excellent technology writer at The Coin Republic. He is passionate about getting a billion of the human population onto Web3. His principle is to write like “explaining to a 6-year old”, so that a layman can learn the potential of, and get benefitted from this revolutionary technology.