It started with a mysterious humming noise that sounded like a wave “but 100 times more annoying,” according to local reports. Then residents of an estate in Alberta, Canada did some investigating and found out that the weird racket was actually a Bitcoin mining power plant—one that was running without anybody’s knowledge.
The power plant had been set up by Vancouver-based data center and power firm Link Global to mint new tokens of the world’s biggest cryptocurrency. The problem: they built the thing without obtaining planning permission.
Now, Alberta's Utilities Commission (AUC), which regulates electricity and natural gas, wants to hit Link Global with a $5.6 million ($7.1 million CAD) fine.
“The AUC is in the midst of a proceeding to examine complaints it received from landowners related to Link Global’s operations,” the commission told Motherboard in an email. “The complaints centred on noise and were related to generating facilities the company installed and operated without meeting Alberta’s legislative requirements (laws), including obtaining a licence through applying to the AUC.”
“The AUC regulates utility matters, not Bitcoin mining,” it added. “As part of its process, the AUC conducted an investigation of the generating facilities through its enforcement staff. The enforcement staff have recommended a penalty for contraventions of legislation.”
Link Global set up the operation of four 1.25 MW generators in Sturgeon County last year, according to CBC. It used a nearby dormant natural gas well to power the operation. Two plants were set up without permission, with one running for over 426 days without approval.
Bitcoin mining is an extremely energy-intensive process of using lots of powerful computers to verify transactions on the blockchain. Companies that mine the asset use a lot of power and are increasingly looking to pick up what would be otherwise wasted energy to be more resourceful and green. Ailing fossil fuel energy generators have also started integrating Bitcoin mines into their operations to make a profit.
Link Global set up their operation without telling people in the area, the AUC or the local government, CBC reported. The news outlet quoted one resident saying that the noise from the plant was “such a racket that none of my family could sleep.”
Stephen Jenkins, the company’s CEO, said in a statement last week that he acknowledged Link Global had “made some mistakes” but his team would provide “facts and evidence to show what would be only the second disgorgement order in AUC history is unwarranted.”
Jenkins told Motherboard that he acknowledged the company should have consulted with residents. He said in an email: “The team set up the facility within our understanding of AUC regulation that ‘under 10 mw’ and self generation, where we err’d was that there was a need to have better consultation and ensure the neighbourhood participation on potential noise impacts. This is what led to where we are today.”
The AUC argues that Link Global should pay a fine of nearly $1.5 million for the gains made from generating electricity. It argues that $4 million should be paid as a fine for what Link Global made on Bitcoin mining profits.
Jenkins added that the hearing later this month will be an opportunity to “provide a sound argument that disgorgement is not warranted.”