Malaysia steamrolls 1,069 Bitcoin mining machines after owners stole energy

Crackdown against cryptocurrency mining activities follows recent measures in China, Iran and the UK

A representation of bitcoin is seen in front of a stock graph in this illustration taken November 19, 2020. Reuters

Authorities in Malaysia arrested the owners of a cryptocurrency mining farm for stealing energy, shut down the unit and steamrollered 1,069 of its mining machines worth 5.3 million Malaysian ringgit ($1.25m), reports said.

The raid was a joint operation carried out by the police and Sarawak Energy Berhad in the Malaysian city of Miri, according to local newspaper The Star. The operation took place between February and April and those arrested were charged with stealing energy, the newspaper added.

The arrests follow a crackdown against Bitcoin miners in China in June, when authorities, concerned about the environmental impact of cryptocurrency mining, closed down operations in Sichuan province.

Electricity is a primary input in the mining of Bitcoin and other cryptocurrencies. The coins are mined by computers that process complex algorithms in halls that span the area of several football pitches. In April, researchers at Cambridge University estimated that the electricity consumption of the Bitcoin network is almost 120 terawatt-hours per year. That is more than the UAE's energy consumption at 119.45 terawatt-hours, and on course to overtake Pakistan.

“A total of six people have been successfully charged under Section 379 of the Penal Code for electricity theft and have been fined up to 8,000 Malaysian Ringgits [$1,896] and jailed for up to eight months,” Miri police chief Hakemal Hawari said.

“The electricity theft for mining Bitcoin activities has caused frequent power outages and in 2021, three houses were razed due to illegal electricity supply connections,” he added.

The SEB said it lost 8.4m ringgit ($1.98m) worth of electricity due to Bitcoin mining operations. Local news outlet Dayak Daily released a video of the police steamrollering the mining rigs in Miri.

In May, UK police officers forced their way into an enormous Bitcoin mine at the Great Bridge Industrial Estate in Sandwell, the West Midlands, where they found a large bank of around 100 computers used for mining.

“My understanding is that mining for cryptocurrency is not itself illegal but clearly abstracting electricity from the mains supply to power it is,” Sergeant Jennifer Griffin, of Sandwell Police, said in a statement.

In May, Iran banned the mining of cryptocurrencies such as Bitcoin for nearly four months as part of efforts to reduce power cuts caused by surging electricity demand during the hot and dry summer.

In June, Iranian authorities seized 7,000 computers at an illegal cryptocurrency farm in Tehran.