Illegal Bitcoin Mining Wreaked Havoc in Malaysia
Illegal Bitcoin mining becomes one of the most negative elements for Malaysia’s economy and electricity system
According to a recent specialized media report, clandestine mining activities have caused $755 million in losses to Malaysia.
This amount of losses is accumulated since 2018, forcing the authorities to intensify the campaign of persecution and dismantling. The measure becomes a necessity for the country, considering that digital mining without payment of bills becomes a very profitable business. The latter encourages the expansion of existing operators and attracts new miners.
If this situation gets out of control, the impact on the local power system could be of great proportions. According to the aforementioned media, the country’s deputy energy minister, Akmal Nasir, regretted that the situation would reach the point of causing significant losses. Simply put, clandestine mining operations are becoming a threat to stability as they impact Malaysia’s national income.
While the official admits that digital mining represents a fraction of the country’s total consumption, he describes the financial impact as dire.
“These losses from illegal bitcoin mining alone, which should have contributed to revenue, have risen to billions,” says Akmal Nasir, Malaysia’s deputy minister of energy conversion and water.
Illegal Crypto Miners in Malaysia Have Reportedly Stolen $723 Million Worth of Electricity Since 2018
Malaysia’s deputy energy and water minister revealed the figure at an event where more than 2,000 mining devices seized in an operation were destroyed.
Illegal cryptocurrency mining operators in Malaysia have stolen $723 million worth of electricity between 2018 and 2023, according to Malaysia’s deputy energy and water minister.
“Electricity theft by cryptocurrency miners occurs because they believe this activity cannot be detected due to the lack of meters on their premises,” Nasir said.
“However, power companies have various methods to detect unusual electricity consumption in an area,” he added, explaining how Malaysian officials were able to seize more than 2,000 devices in an October 2022 operation.
Illegal Bitcoin Mining Affects Malaysian Citizens
As a result of high energy consumption, illegal digital mining is a major problem for several countries. In South America, the issue has been highlighted by recent cases in Venezuela and Paraguay. In the latter country, the penal code has been amended to punish state defrauders with up to 10 years in prison.
In any case, Malaysian authorities say they are ready to curb the losses caused by the illegal activity. They say that losses range from $22 million to $44 million a year from the theft of electricity to keep mining operations running.
Nasir regrets that the citizens will be the ones to suffer, as they will have to face tariff measures to cover the losses. He also stressed that the authorities will continue to confiscate mining materials that are not declared as legal to the authorities.
Recently, the country’s security forces seized about $500 thousand in materials related to the illegal mining of bitcoin. The latter would include electrical equipment and about 349 ASIC mining machines. A total of 1219 electrical devices without security labels were also confiscated, they reported.
In parallel, the authorities are also cracking down on illegal trading activities based on digital assets. As clandestine crypto-mining activities cause problems for the nation, its security forces are stepping up the campaign to dismantle these centers.
Cryptocurrency mining is not illegal in the country, but the act of stealing electricity to mine digital assets is, Malaysia’s Universiti Teknologi MARA explained in December 2022.
By Leonardo Perez