Authorities on Borneo island discovered the machines, worth an estimated 5.3 million ringgit ($1.25 million), in crackdowns between February and April.
Eight people were arrested for allegedly stealing the equivalent of $2 million worth of electricity to power the energy-hungry computers, according to police.
“Their actions are dangerous for life and property, as they can cause power outages.”
The 1,069 mining machines were laid out in a car park of a police station in Miri last week and crushed with a steamroller.
Six of those arrested were convicted of stealing electricity, jailed for six months and fined.
Crypto-mining — the process by which computers mint new virtual currency and validate transactions — requires vast amounts of energy and processing power.
The process typically involves large numbers of sophisticated computers that form a specially designed “rig” that runs the complex calculations required to maintain a cryptocurrency network.
Bitcoin mining is common in the Southeast Asian nation, and there are regular reports of police arresting crypto-miners and seizing their rigs. While energy-hungry, the process can be lucrative with each bitcoin currently worth more than $32,000.