Malaysian police clamp down on bitcoin miners, destroying 1,069 bitcoin mining rigs with a steamroller

Malaysian authorities last week launched a crackdown on bitcoin miners, seizing 1,069 bitcoin mining rigs and destroying them with a steamroller at the police headquarters parking lot.

The raid was part of a joint operation between the law enforcement in the city of Miri and electric utility company Sarawak Energy. A video posted by the electricity company’s news outlet, Dayak Daily, last week, has since gone viral on social media.

Kakemal Hawari, the assistant commissioner of police told news outlets that the crackdown by the police came after miners allegedly stole $2 million worth of electricity from Sarawak power lines. Authorities on the island of Borneo then received a tip that bitcoin miners could be behind the theft. In six separate raids between February and April, $1.26 million worth of bitcoin mining rigs were confiscated.

The Miri city police chief told CNBC that the action by the alleged bitcoin miners led to the burning down of three houses in the city. He added that there were currently no active mining operations underway.

Following a court order, the police crushed the mining equipment rather than sell them to recover part of the money from the stolen electricity. Similar cases of confiscation of bitcoin mining rigs have been reported in other countries. For example, in China, the mining rigs were reportedly auctioned off rather than destroyed.

This wouldn’t be the first time such a case is seen in Malaysia. In March, a bitcoin miner in the city of Melaka reportedly stole $2.2 million worth of energy from power company Tenaga Nasional Berdad. 

Crypto mining is the process of creating new bitcoin through the use of a highly specialized computer to solve complex math problems. Solving the math problem unlocks new tokens and verifies new transactions. Operating the machines at full capacity requires a great deal of electricity, which can tamper with local power grids if blown out of proportion.

Mining for cryptocurrency is not illegal in Malaysia, however, there are strict laws around the use of electricity. Section 37 of the country’s Electricity Supply Act states that any tamper with power lines will attract a fine of up to 100,000 Malaysian ringgit ($23,700) and five-year imprisonment.

Eight people have so far been arrested in connection to the Miri electricity theft, and six have been charged under Section 379 in the Penal Code for stealing energy supply, Hawari added. Those charged will face eight months of jail term and will be fined up to $1,900 per person.