April 29, 2019| AtoZ Markets - The Brazilian media has recently reported about bitcoin mining farm, which was accidentally discovered by the local police during the recent anti-drug traffic raid. The mining farm was found in Porto Alegre by a team from the State Department of Drug Trafficking.
Accidental mining farm’s discovery in a drug traffic neighborhood
The report, dated April 23, states that the State Department for Combating Illicit Drug Trafficking (Denarc) in Porto Alegre, Rio Grande do Sul, came across a crypto miner's house by chance.
The police were following the trail of a suspect in the drug trade, and the discovery of a Brazilian bitcoin mining farm was a surprise for them.
The complex hardware and software worth more than 250 000 BRL (around $63 000 ) was found in the building, located in the Avenida Oscar Pereira area, in the south of the capital.
25 machines were connected, and, according to the police report worked 24 hours a day. The equipment was installed in a small room with poor ventilation.
Police suspect that bitcoins were used in exchange for drugs
While the police were in place, the man claiming to be responsible for the equipment showed up. He said he rented space and was mining bitcoins as his personal investment and denied any involvement with organized crime.
The miner was accused of theft, as mining rigs were powered by a clandestine electrical network. The man was taken into custody.
The machines were collected for expertise, as well. The police suspect that they were smuggled from China. The investigators also assumed that the so-called “bitcoin miner” worked as a security guard of the place, as he had a gun with an erased serial number and a motorcycle with a cloned number. The police deputy Adriano Nonnenmacher stated:
“This is a well-hidden place. Everything points to bitcoin mining. They could have used them as pay to drug traffickers. There is also the possibility of using money from the drug trade to buy bitcoins.”
As the media later reported, the arrested man has quite an extensive criminal history, including drug trafficking practices and murdering a military police officer.
Brazil might have to tighten crypto regulations
Earlier, the Brazilian Federal Revenue Service (RFB) published a draft document requiring Brazilian crypto companies to submit monthly reports on their activities.
Although this project by itself did not mean the public acceptance of cryptocurrency, it proved that the Brazilian government recognized and accepted the activities related to cryptocurrency on its territory.
If the use of cryptocurrency for money laundering is proven, Brazil’s position on digital assets may change and the authorities will have to tighten the rules on the regulation of the crypto mining.