Bitcoin and Crypto Mining Operations Blamed for Electricity Theft in Malaysia
A recent report from a Malaysian news outlet revealed that Bitcoin and crypto mining operations were the main culprits behind a significant amount of electricity theft in the country between 2018 and 2023.
Legal Status of Crypto Mining in Malaysia
Despite the crackdown on unauthorized electricity supplies for crypto mining, it is important to note that crypto mining and related services are not illegal in Malaysia.
Losses Due to Unauthorized Electricity Supplies
According to Akmal Nasrullah Mohd Nasir, the Deputy Minister for the Energy Transition and Water Transformation in Malaysia, the country suffered losses of around RM3.4 billion ($723 million) during the specified period due to unauthorized electricity supplies for crypto mining.
During an event where over 2,000 pieces of equipment seized in October 2022 were disposed of, it was revealed that the equipment, valued at $467K, did not have the necessary ST safety certificates. Officials present at the event included T Area Enforcement and Operations Director Ismail Zaili Yusop and ST Chief Operating Officer Dr V Sanjayan.
The Deputy Minister emphasized the seriousness of the electricity theft issue and the need for stricter regulations to prevent such incidents in the future.
Combatting Electricity Theft to Ensure Fairness and Sustainability
Electricity theft is not only a problem for energy companies like Tenaga Nasional Berhad (TNB), but it also has negative impacts on the people and the country as a whole. The theft of electricity, especially by those involved in cryptocurrency mining, is a serious offense that undermines the fairness and sustainability of the energy sector.
According to officials, electricity theft by cryptocurrency miners often goes undetected because they do not have meters on their premises. However, energy supply companies have sophisticated methods to detect unusual energy consumption patterns in a specific area. This is why efforts to combat electricity theft are crucial for maintaining a level playing field in the energy sector.
Recently, the deputy public prosecutor ordered the disposal of confiscated items related to electricity theft, in accordance with the Criminal Procedure Code. This signals a strong stance against those who engage in illegal activities that disrupt the energy system and put a strain on resources.
The Ministry of Energy is taking proactive measures to combat electricity theft while also focusing on increasing the production of green and clean energy. By addressing electricity theft and promoting sustainable energy practices, the country can move towards a more efficient and environmentally friendly energy system.
Environmental Disposal Regulations
Akmal emphasized the importance of following the regulations set out in the Environmental Quality Act 1974 and the Environmental Quality (Scheduled Wastes) Regulations 2005 when disposing of goods. It is crucial to adhere to these guidelines to ensure proper and safe disposal of waste.
Legal Status of Crypto and Mining
Despite the recent crackdown on cryptocurrency and mining activities in Malaysia, it is important to note that they are not illegal. However, the unauthorized use of electricity to mine cryptocurrency is considered illegal according to a paper by Malaysia’s Universiti Teknologi MARA. This highlights the need for a proper regulatory framework to address such issues.
The paper suggests that the Malaysian government should establish guidelines for miners to prevent electricity theft and ensure compliance with the law.
Challenges Faced by Crypto Service Providers
In addition to crypto miners, crypto service providers such as exchanges have also faced challenges in Malaysia. Huobi Global, for example, was compelled to cease its operations in the country due to failure to register as required by the authorities. It is essential for all crypto-related businesses to adhere to regulatory requirements to avoid legal repercussions.
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