Reykjavik police

EXCLUSIVE: Iceland releases Russian suspects in ‘Big Bitcoin Heist’

Raids, arrests continue as police try to solve nation’s biggest crime in history

Authorities in Iceland have quietly released two Russian men detained during the investigation of the biggest crime in that country’s history. Police are still on the lookout for $2 million in bitcoin mining equipment, including 600 servers, 600 graphics cards, and 100 motherboards stolen in a string of robberies over the last two months. It is being dubbed “the Big Bitcoin Heist,” though no cryptocurrency has gone missing in this process.  

Early on Wednesday March 7, 2018 heavily armed police raided two buildings. Three men were detained at Grettisgata and four in Ægissíða on the western peninsula of the capital Reykjavik. All are Icelanders. Police sources said the arrests are connected to each other, but they would not say whether they are connected to the heist. This is significant as police officers in Iceland do not carry firearms; only the Special Force does. Even their counterterrorism team is “only armed during an active operation.”

This and a string of petty crimes such as break-ins have brought tension to the normally safe nation.

Authorities this week were drawn to the tiny island community of Heimaey off the coast of Iceland with reports of two suspicious shipping containers. Iceland’s largest energy company, ON Power, had been monitoring the power grid for any increase that would indicate cryptocurrency mining. “The Westman islands get their electricity from the mainland via cable in the ocean” a local source tell us, and most of their economy is based on fishing.

The shipping containers were hooked up to two high voltage cables, which first raised suspicions from locals who contacted the police; authorities did not report what they found. From the outside, it’s hard to distinguish a shipping container running a bitcoin mining rig from the kind of refrigerated shipping container common on an island that trades its fish for groceries.

All told, 13 people including one security guard have been arrested in connection with the heist. It is unclear whether those suspects arrested Wednesday were detained before. Two remain in custody on the mainland. Sources tell us that police “are keeping this close to the vest.”

Authorities have two options to nab the thieves—either bust them trying to get stolen goods out of the country or catch them setting up a mining operation drawing heavily on the power grid. The computers themselves can easily fill two box trucks, something hard to hide on the mostly treeless island nation.

Icelanders originally embraced the new world of bitcoin and cryptocurrency. The nation, known for its political group “The Pirate Party,” was more than happy to bolster is Viking image as a haven to bury digital treasure pillaged overseas. A trendy hotel in Reykjavik installed the nation’s first Bitcoin ATM in February.

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Brendan Sullivan is a writer, producer, and author of the memoir Rivington Was Ours: Lady Gaga, the Lower East Side, and the Prime of Our Lives. Disclosure: he owns cryptocurrencies. Follow him on Twitter.