Photo: Bitcoin.com

Chinese police have seized nearly 7,000 mining rigs that were allegedly run on stolen electricity and arrested 72 multi-level marketing scheme operators for alleged fraud, according to local media.

Police in the city of Tangshan, Hebei province, seized 6,890 bitcoin mining rigs, state broadcaster CCTV reported on Monday. According to the report, this was the result of “special operations to combat the crime of power theft” by public security agencies in various places across the country, acting in conjunction with the State Electric Power Department, Bitcoin.com reported.

The Hebei Tangshan Police claim that since April last year they have conducted comprehensive inspections of more than 70,000 households, factories, mines, courtyards, merchants, communities and villages, in conjunction with the power supply authorities  and other departments.

During one of these investigations, the police found a suspicious private transformer in a compound in a village in Shuangqiao Town, Kaiping District, Tangshan, Hebei. After investigating the site, it was determined that the privately connected transformer was used to mine bitcoin. They seized 1,906 bitcoin miners.

The police also followed a lead and seized three high-power transformers and 790 bitcoin mining machines that were allegedly stealing electricity in a nearby village. According to the police, a rough estimate of the daily power consumption of the 790 bitcoin mining machines that were seized in that one incident was equivalent to the daily electricity consumption of more than 5,000 Chinese households a day. Police said the crackdown on electricity theft will continue.

Police forces in the city of Taiyuan, Shanxi province, have arrested 72 Cloud Token operators, according to an official video shared on social media platform Weibo on Monday. The video shows officers arresting dozens of people in a local train station, hands handcuffed behind their backs, wearing numbered yellow vests and black sacks over their heads. The caption claims that Taiyuan Public Security successfully detected the first Cloud Token platform case in the city that used blockchain to trade virtual currencies in a scam involving more than 30 million yuan (over $4 million) and more than 300 victims.

According to media reports, Cloud Token is a Chinese multi-level marketing scheme with high referral fees that started operating in January of this year. It is said to be similar to the massive Plus Token Ponzi scam that some believe was responsible for crashing crypto prices.

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