Bitcoin Mining Contributing to Massive Electricity Theft in Malaysia: Report

According to a report by a Malaysian news outlet, MalayMail, Bitcoin and crypto mining operations were mostly responsible for the massive electricity theft in the country between 2018 and 2023.

Despite the crackdown, crypto mining and general services are not illegal in the Asian country.

Bitcoin Mining Using Stolen Energy

Akmal Nasrullah Mohd Nasir, the Deputy Minister for the Energy Transition and Water Transformation docket in Malaysia, noted that between 2018 and 2023, the country lost around RM3.4 billion ($723 million) due to unauthorized electricity supplies for crypto mining.

Akmal Nasir spoke at an event where over 2,000 pieces of equipment seized in an October 2022 crackdown were disposed of. As per the report, this equipment, valued at about $467K, lacked ST safety certificates. Present during this event included T Area Enforcement and Operations Director Ismail Zaili Yusop and ST Chief Operating Officer Dr V Sanjayan.

The Deputy ministry head noted that the electricity theft activities are not just bad for Tenaga Nasional Berhad (TNB) but also for the people and the country in general. He said:

“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. However, energy supply companies have various methods to detect unusual energy consumption in an area.”

He mentioned that the deputy public prosecutor ordered the disposal of these items “in accordance with sections 406A and 407 of the Criminal Procedure Code” after completing the court and compound process.

Akmal Nasir mentioned that the ministry is prioritizing efforts to combat electricity theft while bolstering the production of green, clean energy.

The deputy minister also shared a post on the X platform noting the irony of the electricity theft reaching hundreds of millions and, at times, billions in a country that claims to be implementing an energy transition agenda to add new energy sources.

Akmal noted that during disposal, the goods will be disposed of strictly in accordance with the Environmental Quality Act 1974 requirements and the Environmental Quality (Scheduled Wastes) Regulations 2005.

Crypto and Mining Not Illegal

Despite the crackdown, which began in August 2019, crypto and mining are not illegal in Malaysia. However, as per a paper by Malaysia’s Universiti Teknologi MARA, “the act of stealing the electricity to mine the cryptocurrency is the one that is illegal.”

The paper proposed that the Malaysian government create and adopt a proper framework that miners must comply with to curb electricity theft.

Not just crypto miners but also general crypto service providers like some exchanges have been on the wrong end of the Malaysian authorities. For instance, Huobi Global was forced to close services in Malaysia because they failed to register as required.