Minnesota Couple Accused of Electricity Theft for Bitcoin Farm

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Minnesota nonprofit power distributor North Star Electric Cooperative filed a lawsuit against a couple accused of stealing large amounts of electricity to power their cryptocurrency mining operation. According to a civil suit filed in Roseau County Court, the former couple stole and fed electricity to their Bitcoin farm in Roosevelt. The suit named Ryan Jaenicke and Tina Fehlhaber as the main culprits behind a significant loss of power North Star noticed.

The production of some cryptocurrencies requires a process called mining, which involves expensive equipment that consumes vast amounts of energy. Miners are then paid block rewards for their efforts, which helps to offset the expensive cost of the process. However, this process is not the same for all cryptocurrencies, such as meme coins, which are created as parodies of internet culture or random jokes.

According to reports, North Star noticed the loss of electric power and began an investigation, leading to an actual inspection of the company’s equipment. The inspection led employees to equipment connected to their distribution line but not owned by the company. Following the discovery, North Star contacted the Roseau County Sheriff’s Office, which sent deputies to join employees to trace an unauthorized cable.

The investigation traced the cable to a makeshift shed housing two transformer units not owned by North Star. According to reports, deputies and employees searched the home and found at least 26 connected crypto mining units, including fans and several other electronic devices.

Speaking to news publication Inforum, the attorney representing North Star, Joel Fremstad, described the act as motivated by theft and greed. Fremstad said the losses would be in the hundreds of thousands of dollars and that the amount of energy stolen would be enough to run a school or commercial building. North Star is seeking the disgorgement of all profits obtained by the couple, plus $50,000 in damage compensation. According to local reports, the couple could be forced to give up all profits made from mining crypto, in addition to double the amount of power they stole.

Reportedly, Jaenicke attempted to bribe a North Star employee to get more electricity to the shed. He allegedly made two offers of $2,000 and $5,000 and was turned down both times.

Jaenicke hosts a YouTube channel called “Degenerative Passive Income,” where he discusses cryptocurrency mining as an additional income source. In at least one video, Jaenicke showed off his crypto mining setup. In a video posted in March 2022, Jaenicke noted that he made $5,000 in passive income through Bitcoin mining every month.

According to a report from TheMinerMag, this estimate is right. In the video, Jaenicke showed he had 11 S19 Pro mining devices, operating at an energy rate of $0.06/kWh. With a hash cost of $0.0432 TH/s when Bitcoin’s daily hash price was about $0.19 TH/s in March 2022, this results in a net profit of $0.1468 per TH/s per day. At this rate, monthly net profits could hit $4,800 every month.

While crypto mining is expensive, miners introduce tokens into circulation and earn off mining in addition to transaction fees. As adoption increases, miners are incentivized to continue operations as more services support crypto transactions, including everything from online gambling to shopping at stores run by crypto-friendly merchants.

If you or anyone you know has a gambling problem, call 1-800-GAMBLER.