The world’s largest oil pipeline company has a cryptocurrency problem.
According to Reuters, officials at Transneft revealed that somebody - presumably an employee - used the company’s computers for the unauthorized mining of Monero, the world’s eleventh-largest digital currency with a market capitalization of nearly $5 billion.
Comments from company officials seem to suggest that illegal crypto mining was discovered on more than one occasion.
“Incidents where the company’s hardware was used to manufacture crypto-currency have been found. It could have a negative impact on the productivity of our processing capacity,” Transneft Vice-president Vladimir Rushailo told a company meeting. He did not elaborate.
Russian authorities have repeatedly expressed their intentions to regulate the market for digital currencies after initially threatening to jail anybody caught mining or trading them.
However, Russia’s stance on bitcoin has evolved since 2013. The Russian government and the Ministry of Finance are now seeking to dominate the digital currency by regulating commerce in crypto while also using blockchain technology to its advantage. Over the summer, a close ally of President Vladimir Putin launched a $100 million initiative to transform Russia into a digital-currency mining powerhouse.
Russia’s central bank has said there were risks that cryptocurrencies could be used for money laundering and the financing of terrorism.
Some have speculated that Russia, Venezuela and Iran - three large oil exporters who are struggling with US sanctions because they depend on the dollar to sell their oil - could launch a decentralized digital currency akin to bitcoin - something that would allow anonymous transactions on top of a blockchain - to facilitate oil contracts and bypass the US financial system.
As Tom Luongo pointed out back in October, Russia’s sometimes bipolar approach to regulating crypto makes sense when you consider the law-and-order priorities of Putin’s government. Putin has alternatively praised and criticized digital currencies.
But as far as most experts can tell, the goal with Russian official crypto-policy is to stamp out the illegal activities – the money laundering, terrorism-financing, human-trafficking, etc. – while simultaneously using the technology to modernize Russia’s internal capital handling capabilities.
Of course, this unauthorized mining activity at Transneft would fall into the latter camp.