In Malaysia, illegal cryptocurrency mining operations have siphoned off approximately $723 million worth of electricity between 2018 and 2023, a staggering revelation made by the country’s Deputy Minister for Energy and Water, Akmal Nasrullah Mohd Nasir.
The Scale of Electricity Theft
The Deputy Minister disclosed this alarming figure during an event highlighting the ongoing battle against electricity theft by unauthorized crypto mining activities. The event also included the destruction of 2,022 confiscated items, valued at around $467,000. These items included not only Bitcoin mining machines but also various pieces of electrical equipment, as reported by Malay Mail.
Nasir emphasized the detrimental effects of these illegal operations on Tenaga Nasional Berhad, the state-controlled power operator, and the local communities in the impacted areas. These illegal setups often bypass the formal grid in several ways:
- Avoiding registration with relevant authorities.
- Manipulating ways to bypass or tamper with electricity meters.
- Diverting electricity directly from power lines.
“The theft of electricity by those who mine cryptocurrency occurs because they believe this activity cannot be detected due to the absence of meters on their premises,” Nasir explained. He further added that energy supply companies have developed sophisticated methods to detect unusual energy consumption patterns, which facilitated the seizure of over 2,000 items in an operation in October 2022.
Legal Stance on Crypto Mining and Theft
While mining cryptocurrency is not illegal in Malaysia, using stolen electricity to fuel such operations is against the law, as clarified by Malaysia’s Universiti Teknologi MARA in December 2022. Malaysian authorities have been actively seizing cryptocurrency mining equipment since at least August 2019, adhering strictly to the country’s criminal procedure laws. In a striking demonstration of their zero-tolerance policy, some of the seized machines were destroyed under a steamroller.
Nasir highlighted that curbing illegal crypto mining has been a key priority for his ministry. This initiative is part of a broader effort to protect the integrity of the nation’s power supply and to encourage the transition towards renewable energy sources. These efforts are crucial as they not only prevent financial losses but also promote a more sustainable energy consumption pattern within the burgeoning digital economy sector.
Regulatory Actions on Unregistered Exchanges
In addition to targeting illegal miners, Malaysia has also taken firm action against unregistered cryptocurrency exchanges. In May of the previous year, the Securities Commission Malaysia mandated the closure of Huobi Global’s operations within the country for failing to register its trading services. The only legally registered cryptocurrency trading platforms in Malaysia currently are HATA Digital, Luno, SINEGY, MX Global, Tokenize Technology, and Torum International.
| Platform Name | Registration Status |
|---|---|
| HATA Digital | Registered |
| Luno | Registered |
| SINEGY | Registered |
| MX Global | Registered |
| Tokenize Technology | Registered |
| Torum International | Registered |
The Malaysian government’s steadfast approach in dealing with illegal cryptocurrency mining and the regulation of digital asset exchanges underscores its commitment to upholding law and order in the digital age. By enforcing these measures, Malaysia aims to safeguard its infrastructure and promote a healthy, regulated environment for technological and economic growth.
Featured image credit: Trinn Suwannapha via Flickr
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