In a startling revelation, Malaysia’s Deputy Minister of Energy Transition and Water Transformation Akmal Nasrullah Mohd Nasir disclosed that illegal cryptocurrency mining operations have stolen approximately $723 million worth of electricity between 2018 and 2023.
This announcement was made during an event where authorities disposed of over 2,000 seized mining machines and electrical equipment, collectively valued at around $467,000.
The Scale of Theft
The extensive electricity theft has significantly impacted Malaysia’s state-controlled power operator, Tenaga Nasional Berhad, and disrupted local communities. Illegal mining operations typically circumvent proper registration with authorities by bypassing electricity meters or directly tapping into power lines, thereby avoiding detection.
“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. However, he emphasized that energy supply companies possess various methods to identify unusual energy consumption patterns, which played a crucial role in the October 2022 operation that led to the seizure of over 2,000 items.
Akmal Nasir also made a post on X highlighting the crucial situation where he said: ”The government is making a big deal about implementing an energy transition agenda to increase new energy sources. But at the same time, electricity theft amounting to hundreds of millions, even reaching billions of ringgit a year, is happening in our country. How ironic.”
Kerajaan heboh nak laksanakan agenda peralihan tenaga sebab nak tambah sumber tenaga yang baru.
Tapi dalam masa yang sama kecurian elektrik sampai ratusan juta, ada tahun mencecah berbilion ringgit setahun berlaku di negara kita.
Ironi sungguh. pic.twitter.com/ZkWz7eIWrn
— Akmal Nasir (@akmalnasir) July 10, 2024
Impact and Enforcement
Despite cryptocurrency mining itself not being illegal in Malaysia, the act of stealing electricity to power these operations is a criminal offence. The country’s Universiti Teknologi MARA reiterated this stance in December 2022. Malaysian authorities have been actively cracking down on these illegal operations since at least August 2019, adhering to the country’s criminal procedure laws.
In a symbolic display of enforcement, some of the confiscated mining machines were destroyed by a steamroller during the recent event. Nasir highlighted that curtailing illegal miners has been a priority for his ministry, alongside efforts to increase Malaysia’s renewable energy sources.
Regulatory Actions
Malaysia has also taken a firm stance against unregistered cryptocurrency exchanges. In May of last year, the Securities Commission Malaysia ordered Huobi Global to cease operations for failing to register its trading services. Currently, only a select few exchanges, including HATA Digital, Luno, SINEGY, MX Global, Tokenize Technology, and Torum International, are officially registered to operate within the country.
The extensive theft of electricity by illegal cryptocurrency mining operations in Malaysia sheds light on the challenges faced by regulatory bodies in managing and overseeing the burgeoning crypto industry. As Malaysia continues to enhance its renewable energy sources and crack down on illegal activities, these efforts aim to stabilize and secure the nation’s energy infrastructure and financial ecosystem.
