18 data centers in Sweden have been shut down by Sweden’s tax agency.

The Skatteverket closed the sites down after it identified the data centers had hidden involvement in crypto mining, according to a report from Cryptonews.

The investigation took place from 2020 to 2023 and revealed that the data centers deliberately exploited tax incentives for which they are ineligible.

Sweden’s tax agency said it is owed 990 million Swedish krona ($91m), including VAT and surcharges.

The agency report said it is difficult to determine the purpose of data centers in Sweden and the companies or people using them.

A national risk assessment of money laundering in Sweden in 2020 previously identified activities, such as cryptomining as a risk. However, the Money Laundering Act in Sweden still excludes crypto data centers and enables them to operate without oversight.

The report said the lack of oversight enables crypto data centers to carry out illicit financial transactions, evade tax, and facilitate money laundering.

Patrik Lillqvist, head of Sweden’s tax agency intelligence unit, said: “There is an incentive for unscrupulous actors to conceal their cryptocurrency mining operations and instead claim that they are conducting VAT-liable business activities.”

Companies, such as Datacenter AB and Datorhall AB, reported their business activities as graphic design and consulting services respectively to avoid paying taxes.

However, investigations into both companies revealed that 93 percent of Datacenter AB’s web browsing history was crypto-related, and all of Datorhall AB’s computing infrastructure was dedicated to crypto mining.

Ten decision outcomes were initially appealed, but courts upheld the findings in eight cases.

The Governor of Sweden’s Central Bank expressed concern last month regarding Bitcoin’s integration into the country’s financial system. Concerns included the speculative nature of Bitcoin and its potential for significant investor losses.

Towards the end of last year, Hive Digital Technologies acquired another cryptomining data center in Sweden. The data center operator has locations across Sweden, Iceland, and Canada, promoting green energy for cryptomining.

Neighboring country Norway recently announced plans to be the first European country to close the door on cryptomining data centers.