The Malaysian police are steaming Bitcoin mining rigs value $ 1.25 million

Call it a crypto crackdown – literally.

Malaysian authorities seized 1,069 Bitcoin mining rigs, laid them out in a police headquarters parking lot, and used a steamroller to crush them as part of a joint operation by law enforcement in the city of Miri and electricity company Sarawak Energy.

Deputy Police Commissioner Hakemal Hawari told CNBC the raid came after miners allegedly stole $ 2 million of electricity from Sarawak Energy power lines.

A video of the event, released in Sarawak by local Sarawak news agency Dayak Daily last week, has since gone viral on social media.

Following a tip-off, the authorities on the island of Borneo seized the drilling rigs in six separate raids between February and April. In total, police destroyed about $ 1.26 million in mining equipment.

According to a court order, the police decided to shred the mining equipment instead of selling it. Other countries like China have taken a different route and auctioned off allegedly confiscated drilling rigs.

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Hawari said that electricity theft by Bitcoin miners caused three houses in the city to burn down. The Miri police chief told CNBC that no other active mining operations are currently underway.

Crypto mining is the energy-intensive process that creates new bitcoins. When people “mine” it actually means that they are trying to solve a complex math problem with a highly specialized computer. The solution to this problem is both the activation of new tokens and the verification of new transactions. However, running these machines at full capacity consumes a lot of electricity, which can put local power grids at risk.

While mining cryptocurrencies is not illegal in Malaysia, there are strict laws governing electricity usage. Section 37 of the Malaysian Electricity Supply Act threatens fines of up to 100,000 Malaysian ringgit (US $ 23,700) and five years in prison for tampering with power lines.

The Cambridge Center for Alternative Finance estimates that Malaysia accounts for 3.44% of all Bitcoin miners in the world, making it one of the top ten mining destinations in the world.

Hawari said eight people were arrested in connection with the Miri mining operation and six people were charged with stealing energy supplies under Section 379 of the Criminal Code. The defendants will be jailed for eight months and face a fine of up to $ 1,900 per person.

This is just the latest example of Malaysia’s struggle to track down crypto mining criminals.

In March, a Bitcoin miner in the city of Melaka, Malaysia, stole $ 2.2 million of electricity from the energy company Tenaga Nasional Berhad.

Malaysian Borneo is much less densely populated than the Malaysian Peninsula.

– CNBC’s Nessa Anwar contributed to this report.

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