The Russian Federal Customs Service has initiated a probe into DTPK, an importer of Bitmain miners, for submitting falsified documents to customs officials and evading $1.2 million in duties. The false documents had listed a much lower price for the miners and their power elements relative to their market price, as reported by CoinDesk, July 31, 2019.
Grey Mining Industry
According to Alexey Afanasev or Intellion, most hardware coming from China to Russia lacks proper documentation and authorization – 70 percent of miners that are imported from China are brought via grey schemes.
Bitmain’s Russia spokesperson believes the grey imports are being brought by companies that buy ASIC miners in wholesale and sell them to retail customers.
DTPK failed to pay the $1.2 million in dues on 6,012 miners imported by them between August 2017 and February 2018. The firm reportedly told Russian customs that they received the miners from a Korean firm. When contacted by customs, the Korean firm denied holding any contract with DTPK, except one from 2012 that expired some time ago.
The investigation was publicized by Alexander Shashkov, founder of Intellion Mining. According to Shashkov, Russian authorities showed up to their office with 30 odd officers, equipped with heavy firearms, telling people to get their hands off the machines. After being unable to show that their clients had presented valid documentation, authorities seized 2,500 miners.
These incidents are representative of the need to adhere to regulation even if you are operating in a market on the fringes of the law.
Most of this demand is fuelled by interested miners who do not want to wait for Bitmain to deliver their product and go to middlemen with improper documentation. Even though the customers are not directly at fault, this serves as a lesson to verify authenticity and legality before purchase.
Can Mining Be a Global Industry?
With a new age of social and financial infrastructure being built through the blockchain, the advent of mining as a legitimate business may have just begun.
Iran has officially recognized mining as an industry and many countries may see the benefits of this and follow suit. Although an energy-intensive process, it is a manner of securing network integrity with relatively lower costs when compared to traditional bank security. Mining with renewable energy could create a new age of business fuelled by decentralization and sustainable security.