Chinese headmaster fired after setting up his own secret cryptomining rig at school

A Chinese headmaster has lost his job after it was discovered he was stealing the school’s electricity to power a secret cryptocurrency-mining rig.

As the South China Morning Post reports, Lei Hua, the head teacher of a school in the central province of Hunan, built a stack of eight servers that run day and night, mining for the Ethereum cryptocurrency.

According to the report, Lei paid 10,000 yuan (approximately US $1400) in June 2017 to buy his first cryptomining machine, which he set up at his home.

However, the headmaster soon discovered that his activities were consuming a significant amount of electricity – 21 kWH per day – and in an attempt to save himself money, Lei is said to have relocated the machine to his school’s computer room, where it was soon joined by more mining machines.

Astonishingly, the school’s deputy headmaster is also said to have joined the scheme, buying a mining machine with Lei’s help that also gobbled up the school’s power supply.

In all, a total of eight cryptomining machines were installed in the school between mid-2017 and the summer of 2018.

After one year, an electricity bill of 14,700 yuan (US $2120) had been racked up, causing a school employee to raise a concern with the headmaster about why the school might be using so much electricity. Lei, however, dismissed the question and blamed the increased bill on the cost of air conditioning and heaters.

It was only when fellow teachers at the school became suspicious of the continual sound of whirring computers that the rig of eight cryptomining devices was identified.

Both Lei and his deputy headmaster have had their cryptocurrency earnings seized by the authorities, although it is not known how much they might have earnt through their clandestine operation. Lei was dismissed last month, according to reports, and his deputy given an official warning.

It’s an amusing story, but there are genuine concerns for other organisations here.

The cryptocurrency ‘gold rush’ has encouraged many people to break rules and even the law, motivated by the dream of earning themselves a fortune.

We’ve often seen this exhibited through the use of cryptomining malware impacting internet-connected PCs, but it’s equally an issue inside companies and organisations where staff might be tempted to sneak in a few computers to mine away under a desk, or in a seldom-visited server room.

Perhaps the most notorious example of this was the arrest earlier this year of a group of Russian nuclear scientists, who hijacked their own supercomputer at a top-secret nuclear weapon facility to allegedly mine for cryptocurrencies.

With the huge amount of energy and great computational power required to mine cryptocurrencies, having a supercomputer at your disposal gives you something of an advantage. Especially when someone else is paying for the electricity…

Organisations need to keep a close eye on what is happening on their network, and whether someone might have sneaked in additional computing equipment for their own purposes without permission.

After all, if you don’t have tight control over what is running in your organisation, you might have more problems than just a high electricity bill.

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