Two top administrators for the Patterson Joint Unified School District in California have been criminally charged for allegedly running a secret cryptocurrency mining operation using the school’s electricity and computer networks.
The U.S. Justice Department accused Jeffrey Menge, the assistant superintendent and chief business officer, and Eric Drabert, the IT director, of installing high-end graphics cards on school premises to mine cryptocurrency. The earnings were then transferred to their cryptocurrency wallets.
Specific details remain unclear regarding how many of the district’s 10 school buildings were exploited, which cryptocurrencies were mined, and the full scale of the energy and hardware usage. However, the brazen scheme highlights growing concern from U.S. authorities about crypto’s environmental impact amid the ongoing crackdown on energy waste.
Just this week, the Department of Energy mandated new reporting requirements for all commercial-scale crypto miners to disclose electricity consumption over a six-month trial period. This followed data showing the immense energy required for crypto mining – over 266,000 kilowatt-hours for a single bitcoin.
As crypto prices rally, illegal mining operations have popped up from government buildings to corporate data centers, taking advantage of subsidized energy costs. However, the charges against the school administrators represent an even more egregious case given their position of public trust.
The incident calls attention to the prevalence of crypto mining within critical institutions, the lack of sufficient oversight, and the moral hazard it encourages. For a technology meant to enable peer-to-peer transactions without third-party trust, the promises of crypto seem to unravel quickly in the hands of bad actors. How schools and other civic organizations can properly safeguard against such schemes remains an open question.
