Malaysia was rocked by an unexpected discovery on Tuesday when an explosion and billowing smoke from a house along Lorong Cekara Purnama, Bandar Puncak Alam, led authorities to uncover an illegal bitcoin mining operation.

The latest development comes as the Southeast Asian country continues to battle unauthorized crypto mining, which has caused significant financial losses and strains on the country’s power infrastructure.

Electrical Fire Exposes Illegal Operation

Sungai Buloh district police chief, Superintendent Mohd Hafiz Muhammad Nor, revealed that 14 volunteer firefighters from Saujana Utama and Bestari Jaya were dispatched after a local woman reported the incident to the Sungai Buloh district police headquarters at 11:41 a.m. on February 11th.

Upon arrival, both firefighters and patrolling police officers had to forcibly enter the unoccupied house, where they found the fire originating from a room filled with modified electrical circuits. They had been illegally connected to the power grid and had short-circuited which caused the blaze.

After extinguishing the fire on the evening of Tuesday, a joint investigation by the police and Tenaga Nasional Berhad (TNB) personnel revealed the house had been illegally drawing electricity for bitcoin mining. Authorities seized nine Bitcoin mining rigs, nine blower fans, and a D-link router.

The latest case shed light on yet another instance of illicit cryptocurrency operations that have been growing in frequency across Malaysia.

Bitcoin Miners Stealing Electricity in Malaysia

Between 2018 and 2023, Malaysia lost approximately $723 million due to unauthorized electricity use for crypto mining. Deputy Minister Akmal Nasir had then stated that miners exploit unmetered power, but energy providers have detection methods. In an October 2022 crackdown, authorities seized and destroyed over 2,000 uncertified mining devices worth $467K.

Despite these losses, cryptocurrency mining itself is not illegal in Malaysia but electricity theft in the country is a serious offense that carries penalties of up to RM100,000 ($21,000) in fines or five years in prison.

Last August, Malaysian authorities arrested seven individuals – three locals and four foreigners – for allegedly stealing electricity for Bitcoin mining. The Sepang District Police Chief confirmed that none had prior criminal records. Officials seized 52 mining rigs and electronic devices worth around $57,000.

The same month, Malaysian authorities destroyed 985 seized mining rigs worth $452,500 by crushing them with a steamroller. These machines were confiscated during enforcement operations from 2022 to April 2024.