The Russian Federal Customs Service has opened a criminal investigation into an importer of bitcoin miners for potential underpayment of customs fees.
The Far-East Trading and Industrial Company, or DTPK, may have failed to pay about $1.2 million on 6,012 Bitmain-manufactured ASIC miners imported from August 2017 to February 2018, according to a search warrant obtained by CoinDesk.
DTPK, based in Moscow, showed customs officers falsified documents with the incorrect prices for the equipment, which included Bitmain’s Antminer S9-13.5, L3+ and D3 models, along with power elements for them, says the search warrant, dated July 17.
The company also reported to the customs service that it received the miners from a Korean firm, MSR Co., via a Hong Kong-based company called Manli. However, when contacted by customs officers, MSR said it didn’t have a contract with DTPK, except an expired one signed back in 2012, the document says.
The warrant, translated from Russian, claims:
“In an undefined time, but no later than August 8, 2017, [DTPK CEO] Artem Aleksandrovich Bublik … got involved in a criminal conspiracy with undefined individuals, the goal of the conspiracy being avoiding due customs fees in especially large amounts while importing into the Eurasian Economic Union of ASIC miners and power elements for ASIC miners.”
When reached by CoinDesk, Bublik asked this reporter to call him back later.
He hasn’t picked up the phone since. The customs service declined to comment because CoinDesk is not accredited with Russia’s Ministry of Foreign Affairs.
An armed raid for ASICs
The investigation was made public during the TerraCrypto mining conference in Moscow on July 25.
Alexander Shashkov, the founder of Intelion Mining, said customs officers suspected the DTPK-imported miners ended up at his company’s data center and sent armed personnel to his offices in two Russian cities as recently as July 18.
Shashkov told the audience:
“In Tula, 20 people with machine guns arrived; in Moscow, 10 people without machine guns, just pistols. … [They] told everyone to get their hands off the computers.”
According to him, Intelion had nothing to do with the miners under investigation, but law enforcement ended up seizing 2,500 ASICs hosted by the company anyway because the clients who owned them hadn’t presented valid documentation.
He followed the story with advice for fellow mining entrepreneurs to always check the documents for the miners they take for hosting.
Most of the mining hardware coming to Russia from China may be lacking proper documentation, market participants say.
“Seventy percent of miners from China are coming via grey schemes, but we’re working only with the legit ones,” Intelion’s sales director, Alexey Afanasev, told CoinDesk.
Anton Makarchuk, chief marketing officer of Cryptouniverse, a company selling mining equipment in Russia, agreed with that estimate.
Bitmain’s representative in Russia, Yulia Fetisova, told CoinDesk the grey imports might be coming into the country through companies that buy large batches of miners from the Beijing-based manufacturer and resell them to retail clients.
“The grey ones come from the Chinese reselling companies and don’t go through the Russian office. Often, people don’t want to wait for the delivery from us, so they go to these reselling companies because they want their miners here and now.”
The waiting time for Bitmain’s hardware increased this year, she said, with the next shipment of Bitmain’s S17 ASICs available in December at the earliest.
Bitcoin mining image via Shutterstock