Malaysia Clamps Down On Illegal Bitcoin Mining, Seizes About $13 Million Worth Of Mining Equipment

Illegal Bitcoin Mining Operations Peaked in 2021

According to local news outlet Malay Mail on Monday (February 21, 2022), Datuk Seri Abd Jalil Hassan, chief of the Bukit Aman Criminal Investigation Department (CID), said that in 2021, authorities opened 570 investigation papers, arrested 528 people, and confiscated RM54 million ($12.9 million) worth of mining equipment.

Not their First Crackdown

In 2020, Malaysia opened 20 papers, arrested 26 people, and seized RM1.26 million ($301,000) worth of Bitcoin mining rigs. The CID chief noted a 4200% increase in the value of seized equipment from 2020 to 2021.

Also, Datuk said that most of the culprits were 18 – 30 years old, with the most senior at 61-years old.

The CID head said that the suspects conducted Illegal Bitcoin mining in industrial areas with surplus electricity. These offenders hoped to conceal the heat and noise from their mining activities.

Authorities have, however, devised a means to track these Illegal Bitcoin mining operations. Malaysia’s electricity company giant, Tenaga Nasional Bernard (TNB), utilizes drones to detect heat in suspicious areas. If such a place is located, the TNB will deploy the Special Engagement Against Losses (SEAL), a special unit created to curb electricity theft.

Malaysia Battles With Electricity Theft

Malaysian authorities carried out intensive crackdowns against Illegal Bitcoin mining operations in 2021. Back in July, police in Miri on the Island of Borneo, and the energy utility company Sarawak Energy, carried out a joint operation to crush 1069 confiscated mining rigs worth $1.26 million using a steamroller.

The rigs were seized following raids between February and April 2021. According to reports, miners allegedly stole electricity to carry out mining activities costing Sarawak Energy $2 million.

Later in October, the energy utility company found and seized over 1,200 Bitcoin mining rigs in an abandoned factory and also discovered that operators stole electricity for crypto mining.

While there is no law against cryptocurrency mining in Malaysia, authorities enforce stringent rules regarding energy usage. There have been concerns that the persistent Illegal Bitcoin mining and electricity theft will cause fire outbreaks due to the non-compliance by cryptocurrency miners.

Countries Crackdown on Excessive Bitcoin Mining to Save Electricity

Apart from Malaysia, more countries crack down on unlicensed Bitcoin mining operations. China, in 2021, took drastic measures against BTC miners in the country by placing a blanket ban on mining activities and cutting off the power supply, causing operators to move to friendlier jurisdictions.

Kazakhstan, which became a haven for Bitcoin miners, also cut off the energy supply. According to the government, the country started witnessing electricity shortages following the influx of miners.

Furthermore, Iran placed a temporary ban on Bitcoin mining in May 2021 to resume in September of the same year, claiming that such activity caused several blackouts. In December 2021, the country’s Ministry of Energy again suspended crypto mining activities.

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