Illegal crypto mining has become widespread, with some miners using electricity to power their operations without payment. Malaysian Energy Officials reported about $722 million worth of power theft by crypto miners over six years.
Following this discovery, the energy ministry resolved to crack down on illegal crypto-mining operations to curb power theft in the country.
Detrimental Impact of Electricity Theft Via Crypto Mining Activities
The trend of electricity consumption via illegal digital asset mining has escalated in Malaysia. The Southeast Asia country recently reported about RM3.4 billion ($722 million) in power theft through illegal cryptocurrency mining.
According to the report, Malaysian Deputy Minister of Energy Transition and Water Transformation Akmal Nasrullah Mohd Nasir disclosed this on Wednesday during an event to dispose of 2022 confiscated assets, including Bitcoin mining machines.
Nasir noted the increased trend in illegal cryptocurrency mining operations within the country. The ministry also mentioned massive electricity thefts via crypto mining between 2018 and 2023.
Further, the minister pointed out that the illegal miners stole electricity, believing the authorities couldn’t detect it. Primarily, they based their judgment on their operational premises, which had no electricity meters to capture their energy consumption.
Nonetheless, Nasir revealed those miners were wrong in their assumptions. He stated: “However, energy supply companies have various methods to detect unusual energy consumption in an area.”
In addition, Nasir mentioned that Malaysia’s government has prioritized stopping electricity theft via digital asset mining. So, it plans to crack down on all forms of illegal crypto mining within the country.
He further stressed the government’s goals to improve the country’s green and renewable energy production.
The minister also highlighted the detrimental impact of electricity theft by miners on Tenaga Nasional Berhad, Malaysia’s single utility firm. Such activities harm the country’s economy and the entire citizenry.
The Trend in Cryptocurrency Mining Activities
Crypto mining activities and their high energy consumption have remained debatable over the years. Moreover, some people and governments pointed out the negative environmental impact of cryptocurrency mining via carbon emissions.
The primary focus is Bitcoin (BTC) and other protocols using the proof-of-work (PoW) consensus mechanism.
Usually, PoW crypto assets require a considerable amount of electricity in the mining process. So, some miners could illegally alter and bypass electricity meters to cut down on energy costs.
In 2023, a report highlighted that the UK recorded a surge in electricity theft via crypto mining activities and cannabis farms.
Following the advent of cryptocurrency, China remained one of the major hubs for crypto mining operations. However, in 2021, the Chinese government officially banned all crypto-mining activities within the region.
In June, a Bloomberg report noted that crypto miners sought alternative environments in other nations, including Malaysia, Thailand, Indonesia, and Laos. These countries offer considerably lower electricity costs, adequate mining infrastructure, and skilled labour.
Disclaimer: The opinions expressed in this article do not constitute financial advice. We encourage readers to conduct their own research and determine their own risk tolerance before making any financial decisions. Cryptocurrency is a highly volatile, high-risk asset class.
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