Selangor municipal council shuts down bitcoin mining activities in two houses

One of the premises used for bitcoin mining in Puchong Jaya that was raided by the Subang Jaya Municipal Council.
One of the premises used for bitcoin mining in Puchong Jaya that was raided by the Subang Jaya Municipal Council.PHOTO: THE STAR/ASIA NEWS NETWORK

PETALING JAYA (THE STAR/ASIA NEWS NETWORK) - A municipal council in Selangor has put an end to bitcoin mining activities conducted illegally in two residential properties in Puchong town.

The activities had been going on for several months at two separate houses in the Puchong Jaya residential estate in Puchong, for months before the Subang Jaya Municipal Council (MPSJ) acted.

As for bitcoin itself and its cryptocurrency siblings, the Malaysian central bank in December reiterated its stand these are not legal payment methods in the country.

Bank Negara Malaysia has also started a policy compelling digital currency exchange operators to report their activities.

Under the new policy, these digital currency exchangers will be categorised as reporting institutions under the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 .

In the bitcoin mining case in Puchong, residents in the area had complained of about the many visitors coming to the houses at all hours, and making a lot of noise, said MPSJ councillor Frankie Yap.

The cars of the bitcoin miners and their visitors were also often parked indiscriminately in the area and causing obstruction.

"The residents also faced frequent power disruption because the mining activity required a lot of electricity to operate the high-powered computers used to mine bitcoins," said Mr Yap.

To get new bitcoins, miners use special software to solve math problems. It is a process that requires ever more powerful computers to crunch the numbers.

A lot of electricity is consumed and a lot of heat is generated, making bitcoin an increasingly "dirty" activity that contributes huge carbon foot prints.

Mr Yap said the two homes were raided by the local council last month. This was believed to be the first time that a Malaysian authority had acted against bitcoin miners.

Mr Yap said MPSJ ordered the miners to cease operations.

He said the tenants violated local council regulations by turning the houses into business premises.

"Enforcement officers found numerous computers in the houses and too many partitions made from plywood.

"There were also electrical wires running all over the houses at these premises," he said, adding that the wooden partitions posed a fire hazard.

He said recent checks made by the local council's enforcement team confirmed that the activity had stopped.

"The premises were empty, so the council believed the operators had moved out from the residential area," Mr Yap added.