Malaysian Government Blames Bitcoin Mining for Electricity Theft

The Minister of Energy and Water claims the country has lost $682 million since 2018.

By: Pedro Solimano Loading...

steamroller crushing a Bitcoin symbol

The Malaysian government is pointing the finger at crypto mining as the source of electricity theft from the country’s power grid.

Local media outlet Malaymail reported that the country’s minister of energy and water, Akmal Nasrullah Mohd Nasir, said that the energy-intensive activity has cost the country 3.2 billion Malaysian Ringgits (RM) or $682 million since 2018.

“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 said at a press conference on July 10. “However, energy supply companies have various methods to detect unusual energy consumption in an area.”

Nasir added that the mining operations are affecting the state-controlled power operator Tenaga Nasional Berhad and that efforts to combat the theft of electricity are a top priority for the government. In yesterday’s press conference, authorities showed 2,022 seized miners valued at 2.2 million RM or $462 million.

Bitcoin mining is an energy-intensive process that uses specialized computers – known as ASICs – to compete in a cryptographical lottery in search of a random number. Every ten minutes on average, a miner finds the number, adds the latest block of transactions to the blockchain, and receives 3.25 BTC ($187,000) as a reward for their computational efforts.

Malaysian Government Steamrolls Miners

Authorities in the Asian nation have been relentlessly clamping down on mining operations since at least 2019. After seizing thousands of Bitcoin miners in July 2021, Malaysian officials proceeded to destroy 1,069 miners using a steamroller.

Malaysia has legalized and regulated cryptocurrencies, with the Securities Commission overseeing the industry. Tokens are considered securities, and the country has been adamant lately about reining in tax evasion.

According to The Malaysian Reserve, the country’s Inland Revenue Board (IRB) recently conducted a special operation, dubbed Ops Token, to reduce tax revenue leakage from crypto trading and improve the country’s tax administration.

China Ban Forced Miners to Relocate

The Chinese government outlawed domestic crypto mining in 2021.

Although industry experts like crypto VC Nic Carter have said it was because China was rolling out a newly streamlined nationwide power grid, China has also been adamantly anti-Bitcoin for years.

Its most recent prohibition, which kicked out major miners from the country, meant those enterprises had to find new homes. According to Bloomberg, these operations moved to countries like Malaysia, Laos, Thailand, and Indonesia.