Storage with equipment for bitcoin cryptocurrency mining farm — Photo

Brunei’s national police shuts down 2 illegal block reward mining operations

Brunei’s national police have shut down two block reward mining operations that failed to obtain licensing from regulators.

The illegal mining firms were closed following a raid by the trio of the Department of Electrical Services (DES), the Royal Brunei Police Force (RBPF), and the Autoriti Elektric Negara Brunei Darussalam (AENBD). According to the official report, a team of 30 security operatives stormed the premises, disguising them as legitimate commercial operations at Kampong Menglait and Kampong Serasa.

Law enforcement confirmed that block reward mining rigs and machines were discovered at the two locations. Both premises used illegal electricity connections to mask their mining activity, but it is unclear how long the operations have been running.

The RBPF confirms that the raids were done to prevent property damage from electrical fires and to protect the lives of residents.

If found guilty, the suspects could face a grim three years in prison in addition to the payment of a fine. They will be tried under sections 3 and 9 of the Electricity Act for illegally using power without the consent of grid operators.

Brunei’s law enforcement agents have been cracking down on illegal mining operations in the country in recent weeks. The raid on the two locations is coming on the heels of two separate successful raids at the tail end of December.

Block reward mining has picked up steam in Brunei, fuelled by an abundance of cheap electricity and a lack of clear regulations. In May 2022, SMI Vantage launched four mining facilities in Brunei’s capital Bandar Seri Begawan, housing 1500 mining rigs.

However, environmental concerns stemming from the use of natural gas and the grim prospects of a chilling winter may have forced the hands of law enforcement to adopt a negative stance against illegal miners.

Tough times for miners around the world

Digital asset miners are going through a tough patch marred by sterner regulations against their activities. Kazakhstan, a region that housed many of the fleeing Chinese miners, has ordered grid operators to sell only surplus electricity to miners in a tightly controlled market.

The country’s parliament has also ordered an increase in the taxes payable by mining operators while creating new categories of mining licenses. Under the new regime, mining firms will be subject to paying corporate income tax and value-added tax (VAT).

New York’s block reward miners are facing a two-year moratorium while the Paraguayan mining sector is ruing the failure of legislation that was widely expected to trigger growth. 

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