Borneo Busts Illegal Crypto Miners


In recent years, the rise of cryptocurrencies, particularly Bitcoin, has attracted significant interest from miners seeking to profit from the digital gold rush. However, with this increased demand for cryptocurrency mining, there has also been a surge in illegal operations seeking to exploit electricity resources without authorization. In this article, we delve into the case of an illegal cryptocurrency mining operation discovered in Borneo, Malaysia, which was stealing power from the local grid. We will analyze the technical aspects of this illicit operation and its implications for the wider cryptocurrency mining ecosystem.

The Discovery of the Illegal Mining Operation

Authorities in the town of Miri, located on the island of Borneo, received a tip-off from the public, which led them to uncover an illegal cryptocurrency mining operation. The operation comprised 34 cryptocurrency mining servers that were illicitly utilizing stolen electricity through cable tapping. Sarawak Energy, the local energy supplier, played a crucial role in discovering the operation and subsequently notifying the authorities.

The Raid and Seizure of Equipment

In response to the discovery, the authorities promptly shut down the illegal mining operation and seized all the equipment involved. This included the illicitly used servers and the tapping cables responsible for siphoning electricity from the local grid. The seizure of equipment was an essential step in stopping the operation and preventing further exploitation of the energy resources.

Estimation of Stolen Electricity Cost

According to Sarawak Energy's assessment, the illegal mining operation was responsible for consuming approximately 6,000 Malaysian ringgits per month ($1300) worth of stolen electricity. It is essential to note that despite offering some of the lowest energy prices in Malaysia, energy theft remains an ongoing issue in the region.

A Pattern of Illegal Mining in Borneo

This was not an isolated incident. Prior to the Miri case, another public tip-off led to the seizure of over 137 cryptocurrency mining servers in the nearby state of Senadin. The frequency of these illegal mining operations raises concerns about the state's ability to detect and prevent such activities effectively.

Bitcoin Mining Ecosystem and Network Metrics

The broader context of the Bitcoin mining ecosystem is critical to understanding the motivations behind illegal mining operations. In 2023, the network hash rate, which measures the total computational power miners dedicate to securing the blockchain, reached an all-time high. This record hash rate is indicative of a robust and resilient network, as more miners compete to validate transactions and secure the network.

Impact on Smaller Mining Operators

While a high hash rate reflects network strength, it also places strain on smaller mining operators. These smaller entities lack the economies of scale enjoyed by larger mining operations, making it challenging for them to compete for block rewards. As a result, they may resort to unscrupulous practices, such as stealing electricity, to offset their operational costs and remain profitable.

The Attraction of Lower Electricity Prices

Electricity costs represent a significant portion of a mining operation's expenses. Miners in regions with lower electricity prices have a competitive advantage, as they can achieve higher profit margins. Consequently, areas with cheap electricity are more likely to attract both legitimate and illegal mining operations seeking to maximize their gains.

Profit Motive Behind Electricity Theft

The primary driving factor for illegal mining operations stealing electricity is the elimination of electricity running costs. By bypassing the need to pay for electricity, these unlawful operators can bolster their profits and potentially recoup hardware costs more quickly.


The case of the illegal cryptocurrency mining operation in Borneo sheds light on the challenges faced by the broader cryptocurrency mining ecosystem. While the increasing network hash rate indicates the resilience of the Bitcoin network, it also highlights the disparities between large and small mining operators. Regions with lower electricity prices may continue to be targeted by illegal mining operations seeking to exploit the cost advantage. To combat this issue effectively, authorities, energy suppliers, and the cryptocurrency community must collaborate to implement robust detection mechanisms and enforce stringent penalties for energy theft.

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