Illegal Bitcoin Mining Operation Uncovered in Malaysia Following Electrical Fire

• A house fire in Bandar Puncak Alam led to the discovery of an illegal Bitcoin mining operation connected to the power grid.
• Malaysia lost approximately $723 million between 2018 and 2023 due to unauthorized electricity use linked to crypto-mining activities.
• Authorities have intensified crackdowns, seizing mining rigs and arresting individuals involved in illegal mining operations.

An explosion and thick smoke from a house in Bandar Puncak Alam, Malaysia, on February 11, led authorities to discover an unauthorized Bitcoin mining operation. The incident adds to the growing number of cases where illegal cryptocurrency mining has caused financial and infrastructural strain in the country.

Fire Leads to Discovery of Unauthorized Mining Setup

Sungai Buloh district police chief Superintendent Mohd Hafiz Muhammad Nor stated that 14 member firefighters from both Saujana Utama and Bestari Jaya arrived at the site of a house fire after receiving a resident-distressed call. 

The firefighters alongside patrolling officers executed entry into the building until they found the fire source which began in a room where modified electrical circuits existed. A short circuit started when the illegally connected power circuits met the power grid infrastructure thus causing a fire to break out.

Authorities extinguished the fire and began a joint investigation with Tenaga Nasional Berhad (TNB). The probe confirmed that the house was illegally drawing electricity for Bitcoin mining. Nine Bitcoin mining rigs, nine blower fans, and a D-link router were seized from the premises.

Increasing Cases of Electricity Theft for Crypto Mining

Authorities have identified several cases of illegal cryptocurrency mining operations across Malaysia. Between 2018 and 2023, Malaysia reported financial losses of approximately $723 million due to unauthorized electricity use linked to mining activities. Energy providers have implemented detection methods to track such cases, but incidents continue to emerge.

The authorities in October 2022 conducted a crackdown on electricity theft through which they destroyed over 2,000 uncertified mining devices valued at $467,000. Law enforcement in Malaysia intercepted seven people during their arrest last August for conducting Bitcoin mining by stealing electricity. The group involved three local citizens together with four foreign citizens. 

The Sepang District Police confirmed that the suspects did not have prior criminal records. Authorities confiscated 52 mining rigs and electronic devices worth around $57,000 in connection with the case.