Malaysia ranks as world's 6th biggest Bitcoin mining nation but there's a problem

2021 saw a 4,200% increase in illegal mining equipment seized.

Feb. 22, 2022

Malaysia ranks as world's 6th biggest Bitcoin mining nation but there's a problem

Cryptocurreny – it's all the rage right now. While the concept of digital currency has its many merits, the means that people employ to 'mine' certain cryptocurrencies like Bitcoin can often equate to actual, real-world theft.

The act of electricity theft, specifically, to power the hundreds (and sometimes thousands) of illegal bitcoin mining machines in Malaysia has naturally attracted the wrong kind of attention – the all-seeing eyes of the law.

Industrial areas are the best for illegal mining.

IMAGE: Bernama / Free Malaysia Today

In 2021, this nuisance grew exponentially from the previous year, seeing 528 people arrested and almost US$13 million worth of mining equipment seized. The numbers from the previous year pale in comparison, totaling to just 26 arrests and US$301,000 worth of illegal equipment seized by authorities in 2020.

According to Abd Jalil Hassan, the chief of the Bukit Aman Criminal Investigation Department (CID), offenders mainly ranged between those aged 18 and 30 years old, with the oldest suspect being 61 years old.

“We also opened 20 files under the Prevention of Crime Act (POCA) last year and from this number, 10 individuals so far have been placed under restriction order,” said Abd Jalil.

IMAGE: Sarawak Energy

Apparently, the prime spots for carrying out illegal crypto mining operations usually consist of industrial areas, especially in the states of Selangor, Kuala Lumpur, Perak, and Penang. These are locations that are so isolated, even those living in the surroundings won't be able to hear the buzzing whirrs of the mining machines, as well as feel the heat that radiates from them.

But it's not just illegal crypto mining and electricity theft that takes place in these dodgy facilities. The people that run these places also dabble in other serious crimes, like investment fraud. All the money they end up stealing gets turned into cryptocurrency, effectively making each dollar untraceable by authorities (or anyone looking to get their money back) due to the anonymity afforded by this form of currency.

Modern problems require modern solutions.

IMAGE: Reuters / Malay Mail

So how do people find and destroy illegal crypto mining facilities? Sure, you could probably do it the conventional way – search on foot with manual 'house calls', but that would take way too much time and effort.

Instead, Malaysian authorities have made good use of drones fitted with specialized heat detection equipment. After all, illegal mining gets hot, quite literally. A tell-tale sign that an area is an active mining hub can be found in high electricity usage, but low meter readings.

Once the relevant suspicious areas have been confirmed by the relevant authorities – in this case, the main electric utility company Tenaga Nasional Berhad (TNB) – the drones are deployed to confirm suspicions about the heat in the air. And once that's done, you'll get authorities trying to make examples out of these illegal bitcoin operations – like that one time Malaysian police confiscated and steamrolled 1,069 Bitcoin mining machines back in July of 2021.