Crypto mining machines.
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  • China found banned crypto miners siphoning electricity from public entities, Bloomberg reported Friday.
  • The miners stole electricity as a coal shortage created an energy crunch in the country.
  • China's crypto crackdown has helped the US become the world's largest bitcoin miner.
  • For more stories, go to www.BusinessInsider.co.za.

China has uncovered hundreds of cryptocurrency miners who were stealing electricity from government agencies and other public institutions at a time when the country has struggled with a power shortage, according to a Bloomberg report on Friday.

Officials in two eastern provinces - Zhejiang and Jiangsu - recently started targeting miners who were consuming resources from state-owned enterprises, government agencies, research institutions, and universities, the report said, citing a government statement and media reports that didn't name the entities.

The Jiangsu province found about one-fifth of roughly 4,500 internet protocol addresses associated with illegal mining activity had belonged to public institutions, with Bloomberg citing media outlet The Paper.

Meanwhile, the Zhejiang government published photos of equipment seized in raids and said 184 IP addresses were suspected of being involved with illegal mining exploiting public resources.

Crypto miners usually link their equipment to cloud services called mining pools to verify transactions on blockchains. The move allows physical locations to be traced and can lead investigators to accounts with electric companies.

A shortage of coal has resulted in an electricity crunch affecting large portions of China, the world's second-largest economy. Zhejiang and Jiangsu account for more than 16% of China's total gross domestic product.

The report comes just weeks after China banned all cryptocurrency transactions, while Beijing has been engaged in an ongoing campaign to crack down on miners.

The effort has helped the US to overtake China as the world's biggest bitcoin miner, according to a report from the Cambridge Center for Alternative Finance published on Wednesday.

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