Malaysian Government Blames Bitcoin Mining for Electricity Theft
The Malaysian government has attributed a significant portion of electricity theft to crypto mining operations. According to local media outlet Malaymail, Malaysia’s minister of energy and water, Akmal Nasrullah Mohd Nasir, stated that this activity has led to a loss of 3.2 billion Malaysian Ringgits (RM), approximately $682 million, since 2018.
Nasir highlighted that cryptocurrency miners believe their operations are undetectable due to the lack of meters on their premises. However, energy supply companies have methods to detect unusual energy consumption in specific areas. Nasir emphasized that the theft of electricity by crypto miners is a pressing issue, adversely affecting the state-controlled power operator, Tenaga Nasional Berhad. Efforts to combat this theft have become a top priority for the government. In a recent press conference, authorities displayed 2,022 seized miners valued at 2.2 million RM, equivalent to $462 million.
Bitcoin mining is known to be an energy-intensive process, utilizing specialized computers called ASICs to perform complex computations in search of a specific number. On average, every ten minutes, a miner finds this number, adds a new block of transactions to the blockchain, and receives 3.25 BTC (around $187,000) as a reward.
Malaysian authorities have been cracking down on illegal mining operations since at least 2019. In July 2021, officials seized thousands of Bitcoin miners and subsequently destroyed 1,069 of them using a steamroller. Malaysia has legalized and regulated cryptocurrencies, with the Securities Commission overseeing the industry. Cryptocurrencies are considered securities, and the government has been actively addressing issues such as tax evasion.
To tackle tax evasion, the Malaysian Inland Revenue Board (IRB) recently launched a special operation called Ops Token. This initiative aims to reduce tax revenue leakage from crypto trading and improve the country’s tax administration.
China’s 2021 ban on domestic crypto mining forced many operations to relocate to other countries, including Malaysia, Laos, Thailand, and Indonesia. Industry experts, like crypto VC Nic Carter, suggest that China's ban was partly due to the rollout of a streamlined nationwide power grid. However, China has also maintained a long-standing anti-Bitcoin stance.
The Malaysian government's focus on curbing electricity theft highlights the significant impact of illegal crypto mining on the country’s power grid and economy. As authorities continue their efforts to regulate and control the crypto industry, the broader implications for both the energy sector and financial compliance remain critical areas of concern.
