In brief

  • Two Bitcoin mining facilities were raided by Malaysian authorities.
  • They paid only over $14 in monthly power charges allegedly using illegal wiring.
  • Police said over 90 such illegal mining units have been seized in 2020 alone.

Malaysian authorities raided two Bitcoin mining units in the country’s southern Johor district, according to local news outlet The Star on Tuesday. They alleged that the miners had been illegally siphoning off electricity to pay for the mining operation.

The raids were conducted during a joint operation led by the region’s Energy Commission (ST), the city council, and the Inland Revenue Board at the two mining facilities in Iskandar Puteri.

Mining is an energy-intensive activity that racks up high electricity costs for operators—who run specialized machines that perform millions of calculations each network to maintain the Bitcoin network. But despite generous block rewards, margins are slim, which leads to crimes such as electricity theft for operators to remain profitable.

Johor ST regional director Nazlin Alim Sadikhi said the region’s electricity board incurred over MYR 80,000 ($19,300) in losses per month due to the theft. 

Mining machines at a Bitcoin farm. Image: Shutterstock

“We found that illegal wiring was installed so that electricity was supplied directly and not through the meter. The first premises is believed to have been operating for three years while the second premises for two years, ” said Nazlin after the raid. She added that electricity bills for the two premises were only a maximum of MYR 60 ($14,48) a month, which was rather suspect.

The facilities were no makeshift ones either. Nazlin said the authorities recovered over 100 Bitcoin mining machines in the first premises and another 48 in the second premises, making the seized units a mid-sized mining operation.

For now, the operators are in police custody and will be placed on trial at a later date. If found guilty, the report said, they could be fined of over MYR 1 million ($240,000) or 10 years jail or both.

Meanwhile, Nazlin told landlords of such properties to be alert and report any suspicious activities to authorities.

Bitcoin mining has flourished in the past few years in Johor. The report noted over 288 mining operators have been raided since 2018, with more than 90 such instances in 2020 alone.