Illegal cryptocurrency mining has had a detrimental impact on Malaysia’s energy sector and local communities. Since 2018, illicit mining operations have siphoned off electricity valued at approximately $723 million. This alarming figure was disclosed during a recent event where authorities destroyed over 2,000 items, including Bitcoin mining devices and electrical equipment worth around $467,000.
How Is Electricity Stolen for Mining?
Illegal mining operations bypass electricity meters and gain unauthorized access to power lines to avoid detection. Energy providers use various methods to track these activities, identifying abnormal energy consumption patterns to locate illegal miners.
In October 2022, authorities confiscated thousands of illegal mining devices. According to Malaysia’s Deputy Minister of Energy and Water Transformation, Akmal Nasrullah Mohd Nasir, these miners often believe they can operate undetected due to the absence of measuring devices at their facilities.
What Legal Actions Are Taken?
While crypto mining itself is not illegal in Malaysia, unauthorized electricity usage for such activities is strictly forbidden. Universiti Teknologi MARA highlighted this in December 2022, explaining the legal risks associated with electricity theft. Since August 2019, Malaysian authorities have seized illegal mining equipment as per the country’s criminal procedure laws.
To deter future violations, some confiscated devices have been publicly destroyed using a steamroller. Nasir stated that addressing illegal mining activities is a priority, along with initiatives to increase the country’s renewable energy capacity.
Crypto Exchanges and Legal Regulations
Beyond preventing electricity theft, Malaysian regulatory bodies have also worked to legalize crypto exchanges. In May of the previous year, the Malaysian Securities Commission ordered Huobi Global to cease operations for not registering with local authorities.
Currently, only platforms such as HATA Digital, Luno, SINEGY, MX Global, Tokenize Technology, and Torum International are officially licensed to provide crypto trading services in Malaysia.
Key Takeaways for Stakeholders
• Energy providers should enhance detection methods to identify and mitigate illegal mining activities.
• Legal entities need to enforce stricter regulations to prevent unauthorized electricity usage.
• Public awareness campaigns can help educate communities about the consequences of illegal mining.
• Collaboration between energy providers and law enforcement agencies is crucial for effective control.
In conclusion, illegal crypto mining in Malaysia poses significant challenges to the energy sector, prompting authorities to take stringent measures. Effective detection, legal regulations, and public awareness are essential to combat these activities and protect the nation’s energy resources.
