Sweden Busts 18 Data Centers for Secretly Mining Crypto

cryptonews.com:

Sweden’s tax agency identified irregularities in 18 locally operating companies, finding that they hid their involvement in crypto mining, it said Wednesday.

The investigation, which spanned from 2020 to 2023 and focused on data center operations, revealed that they deliberately exploited tax incentives for which they were ineligible.

Patrik Lillqvist, head of the agency’s intelligence unit, explained that the companies’ actions constituted an attempt to secure undue tax advantages. In response, the agency is demanding an additional 990 million Swedish krona ($91 million) in taxes, including value-added tax (VAT) and surcharges.

The report highlighted difficulties investigators encountered in determining the true purpose of data center operations and the identities of those utilizing the computing resources. In a significant number of cases, investigators faced challenges establishing the nature of the business conducted at these facilities.

Further, the report details instances where crypto mining data centers submitted misleading or incomplete information regarding their business activities.

“There is an incentive for unscrupulous actors to conceal their cryptocurrency mining operations and instead claim that they are conducting VAT-liable business activities. In this way, tax revenues disappear from the country in the form of incorrect payments from the state, unpaid output VAT, and unreported crypto assets,” Lillqvist added.

The tax authority further expressed concerns regarding potential money laundering activities. Due to their exclusion from the Money Laundering Act, crypto mining data centers currently operate outside the scope of regulatory oversight. This lack of supervision raises the risk of illicit financial