Bitcoin mining is to blame for Malaysia's $682 million electricity loss

Malaysia's Minister of Energy and Water, Akmal Nasrullah Mohd Nasir, has revealed that the country has lost approximately 3.2 billion Malaysian Ringgits (RM) ($682 million) since 2018 due to electricity theft by cryptocurrency miners.

Cryptocurrency mining has a huge impact

The theft is attributed to miners bypassing meters, making their activities seemingly undetectable. However, Nasir assured that energy companies have methods to identify unusual energy consumption patterns.

The illicit mining operations have significantly affected the state-controlled power operator Tenaga Nasional Berhad. Combating this issue remains a high priority for the government, which has seized 2,022 mining rigs worth around 2.2 million RM ($462 million).

Bitcoin Mining Explained

Bitcoin mining involves using specialized computers, known as ASICs, to solve complex cryptographic puzzles. The first to solve these puzzles is rewarded with Bitcoin, currently valued at approximately $187,000 for each successful block mined.

The Malaysian Government Crackdown

Since 2019, Malaysian authorities have intensified their crackdown on illegal mining activities. In July 2021, they destroyed 1,069 miners using a steamroller as part of their efforts to curb illegal operations.

Malaysia has a regulatory framework for cryptocurrencies, with the Securities Commission overseeing the sector. Tokens are classified as securities, and the country has been tightening its measures to prevent tax evasion related to crypto trading.

The Inland Revenue Board (IRB) recently launched Ops Token, a special operation aimed at reducing tax revenue leakage from crypto trading and enhancing tax administration.

The reason why there are so many miners in Malaysia

China's 2021 ban on domestic crypto mining forced many operations to relocate. Countries like Malaysia, Laos, Thailand, and Indonesia have since become new homes for displaced miners.