In a series of crackdowns on illegal crypto mining operations in the town of Miri on the island of Borneo, Malaysian authorities have seized a total of 171 cryptocurrency mining servers using stolen electricity.
The discovery of a covert mining operation was made possible through a tip-off from the public, and it sheds light on the challenges faced by energy suppliers and law enforcement in combating the growing issue of electricity theft for cryptocurrency mining.
The recent operation in Miri, spearheaded by Sarawak Energy, resulted in the seizure of 34 cryptocurrency mining servers that were found to be tapping into the local grid and utilizing approximately 6,000 Malaysian ringgits ($1300) worth of stolen electricity each month.
Escalating Efforts To Combat Illegal Crypto Mining Activities
All of the illicit operation’s equipment, including servers and tapping wires, was also seized by authorities. A follow-up police investigation is presently being conducted.
This is not an isolated incident, as cryptocurrency mining operations using stolen electricity have become a recurring problem in the region. Recently, in the state of Senadin, authorities seized an additional 137 servers being used in similar activities.
The increased prevalence of such illegal mining operations has put considerable strain on energy providers and law enforcement agencies, prompting them to intensify efforts to counteract these illicit activities.
The rise of illegal cryptocurrency mining comes amid the backdrop of a prolonged bear market for Bitcoin (BTC) miners, which has forced many operations to sell BTC in record amounts to sustain their businesses.
The highly competitive mining ecosystem, coupled with the upcoming Bitcoin halving in April 2024, has led to concerns that smaller operators without economies of scale may struggle to remain profitable.
Bitcoin’s Network Difficulty And Its Impact On Miners
The record-high levels of Bitcoin’s network difficulty have also contributed to the challenges faced by miners, making it more difficult for them to earn rewards.
Experts estimate that mining one BTC could cost companies upward of $30,000, while the reward of 3.125 BTC (approximately $92,000 at the time of writing) may not be sufficient for some operators to cover their expenses.
With Malaysia offering relatively low electricity prices, illegal mining operators are attracted to steal power from the grid, eliminating electricity running costs and maximizing profits.
However, such activities are considered a serious offense under Malaysian law, carrying penalties of up to RM100,000 and/or five years’ imprisonment if found guilty.
The authorities are taking a proactive approach to combat electricity theft, with Sarawak Energy employing meter inspection teams and advanced tools to detect illegal operations.
Additionally, the utility company relies on public tips to uncover suspicious activities, encouraging locals to report any such incidents to their customer care center.
Featured image from Bitcoin Magazine
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