Research from the University of Cambridge shows that Malaysia contributes 2.5% of the total computing power for Bitcoin mining. However, weak crypto legislation is a problem in the Southeast Asian country. Over the past five years, Bitcoin miners have illegally tapped electricity at nearly 14,000 different locations.
Malaysia makes a significant contribution to the security of the Bitcoin network. Electricity is cheap there, but at the same time, the country has long struggled with illegal practices surrounding cryptocurrency mining. Since 2020, miners have stolen 4.6 billion Malaysian Ringgit (RM) worth of electricity. This amounts to approximately 970 million euros.
Criminals Tap Power Illegally for Crypto Mining #
Tenaga Nasional Bhd (TNB) is one of the Malaysian companies affected by power theft. This electricity supplier lost more than a billion dollars over the past four years due to this form of crime. A recent report details how mining operators operate. These criminals often bypass or manipulate electricity meters to tap power.
Akmal Nasrullah Mohd Nasir, Malaysia’s Minister of Energy Transition and Water Resources, explains the situation as follows:
Cryptominers steal electricity because there are no meters at their locations. This makes their activities difficult to detect. However, energy companies use various methods to detect abnormal energy consumption in an area.
The lack of specific regulations and illegal crypto mining practices are a major problem in Malaysia. A billion euros in unauthorized electricity consumption is an enormous amount and puts severe pressure on the country’s electricity grid.
Crackdown on Illegal Crypto Mining #
The Ministry of Energy and Water Transition has significantly scaled up oversight and enforcement in Malaysia. For instance, more companies in the country are using smart meters to monitor live power flows. This allows them to detect suspicious activities more quickly.
The affected electricity supplier, TNB, is also not idle. The company is now working closely with the police and the anti-corruption commission to locate suspicious sites faster and immediately seize mining equipment.
Collaborating with the authorities is just one step TNB is taking in the fight against illegal crypto mining. The company has established an internal database with information on owners and tenants of locations suspected of power theft.
The database serves as a central system for investigators to more quickly recognize abnormal electricity consumption. This makes conducting targeted inspections much simpler and increases the chances of detecting illegal mining activities.
Criminals Arrested for Power Theft #
The stricter enforcement by the authorities is yielding results. For example, last year the police raided a property where 52 mining rigs and equipment worth more than €50,000 were found. Power theft is punishable by imprisonment and/or a fine of 100,000 RM, equivalent to just over €20,000.
During the raid, the police arrested a group believed to be involved in illegal bitcoin mining operations. The group consisted of seven individuals, three from Malaysia and four from abroad. Notably, none had a criminal record.
The arrests are not an isolated incident. Authorities have previously encountered large-scale power theft by crypto miners. During one raid, investigators discovered 120 machines for illegally tapping power at two connected locations. It was estimated that electricity worth over 30,000 RM per month (approximately €6,200) was being stolen monthly.