Malaysia arrests two over illegal Bitcoin mining operation, seizes 73 rigs

Malaysian police have dismantled an illegal Bitcoin mining operation and arrested two men after seizing 73 mining machines that investigators say were powered through stolen electricity.

According to a statement from Batu Gajah district police chief Assistant Commissioner Md Noor Aehawan Mohammad, officers carried out coordinated raids at three properties in Tronoh on Tuesday night under Op Elektrik, uncovering what investigators described as illegal Bitcoin mining activities supported by unauthorized electricity connections.

The operation began at about 9:02 p.m. and involved personnel from the district Criminal Investigation Department together with the Technical Unit of Malaysia’s national electricity provider, Tenaga Nasional Berhad (TNB), also known as the SEAL Team.

Police detained two local men, aged 40 and 52, to assist with the investigation. Alongside the arrests, officers confiscated 73 Bitcoin mining machines and additional equipment believed to have been used to operate the mining network.

Bitcoin mining operation used illegal power connections

Police said inspections carried out during the operation found that each of the three premises had been used for Bitcoin mining. Technical examinations conducted by TNB later confirmed electricity theft at two abandoned houses, while the third property involved in the case was an unoccupied house.

Md Noor Aehawan said investigators found evidence that the mining equipment had been connected through illegal electricity supply lines rather than legitimate metered connections.

Both suspects have been remanded for three days, beginning Wednesday and ending Friday, to facilitate further investigations.

Authorities are investigating the case under Section 427 of Malaysia’s Penal Code for committing mischief, including electricity theft, as well as Section 37(1) of the Electricity Supply Act 1990, which covers interference with electrical installations.

Police also urged residents to report suspicious activities linked to electricity theft or unauthorized cryptocurrency mining. Members of the public with relevant information have been asked to contact the Batu Gajah district police operations room or the nearest police station.

Malaysia has continued targeting illegal Bitcoin mining

The latest enforcement action follows several similar crackdowns carried out across Malaysia over the past year as authorities continue to target cryptocurrency mining operations that bypass electricity meters.

In May, Terengganu police dismantled another suspected Bitcoin mining syndicate during Op Letrik after raiding properties in the Hulu Terengganu and Marang districts. Working alongside TNB’s SEAL unit, officers seized 45 illegal Bitcoin mining machines from two premises, including a residential property in Bukit Perpat and a commercial building in Wakaf Tapai.

At the time, Terengganu police chief Datuk Mohd Khairi Khairuddin said investigators believed the premises had been modified to bypass electricity meters, causing estimated monthly losses of about RM36,000 for TNB. Authorities also seized mining-related equipment valued at approximately RM225,000, although no arrests were announced in that operation.

The Terengganu investigation proceeded under Sections 379 and 427 of the Penal Code together with Section 37 of the Electricity Supply Act 1990.

Earlier cases have exposed electricity theft

Another illegal mining operation came to light in February after firefighters responded to reports of an explosion and smoke at a house in Kuala Lumpur.

Authorities later discovered modified electrical wiring that had caused a fire before uncovering several Bitcoin mining rigs inside the property. Investigators also confirmed that the operation had been drawing electricity through unauthorized connections, prompting a separate investigation.

Malaysia’s national electricity provider has repeatedly warned about the financial impact of electricity theft linked to cryptocurrency mining. TNB reported in 2024 that illegal Bitcoin mining had caused losses of more than 440 million Malaysian ringgit, or roughly $101 million, due to stolen electricity.

The utility also estimated that electricity theft associated with illegal cryptocurrency mining resulted in losses of about $755 million between 2018 and 2023, highlighting the continued challenge posed by unauthorized mining operations across the country.

Outside Malaysia, governments have taken similar action against illicit cryptocurrency mining where unauthorized electricity use has strained national power systems. Iran has conducted repeated crackdowns on illegal mining operations, while Venezuela introduced a ban on crypto mining to protect its electricity grid from excessive energy demand.