Unlawful Bitcoin Mining Scheme Brought to Light in Malaysia: Escalating Issue of Electricity Theft
An illicit Bitcoin mining operation was recently exposed in Bandar Puncak Alam, Malaysia, after a fire erupted in a residential neighborhood. This event underscores the growing problem of power theft associated with cryptocurrency mining in the country.
The incident occurred on Lorong Cekara Purnama, where a house caught fire, prompting local residents to seek emergency assistance around 11:41 AM. Firefighters successfully quelled the flames by 4:45 PM and subsequent investigations uncovered a complex network of nine Bitcoin mining rigs, blower fans, and a D-link router all connected to an unauthorized electricity source. This discovery is just one among many highlighting Malaysia’s ongoing struggle with power theft related to cryptocurrencies.
Although Bitcoin mining is legal in Malaysia, tampering with the electrical supply violates Section 37 of the Electricity Supply Act, constituting a criminal offense. Those found guilty could face fines of up to 100,000 Malaysian ringgit (about $23,700) and potential prison terms of up to five years. Following this revelation, authorities have launched an inquiry to gather evidence that could lead to arrests.
Malaysia’s power infrastructure has increasingly become a target for illegal miners exploiting exorbitant amounts of energy for their mining activities. The situation in Bandar Puncak Alam is not an isolated case. Just last month, Thai authorities uncovered a similar operation in Chonburi that reportedly consumed approximately $3 million worth of electricity using over 1,000 mining machines. Reports suggest that Malaysia has suffered around $750 million in financial losses due to cryptocurrency-related energy theft between 2018 and 2023.
This issue has persisted historically. Four years ago in Miri, Sarawak, authorities seized over 1,000 Bitcoin mining rigs after allegedly diverting around $2 million worth of electricity from the local provider. The confiscated equipment was destroyed in a dramatic operation involving a steamroller crushing the mining rigs.
With Bitcoin’s value soaring to a staggering $97,000 in 2024, per CoinGecko data, the environmental impact of mining has become a significant concern within the industry. The energy consumption linked to Bitcoin mining is astounding, comparable to the annual electricity usage of a country like Poland, estimated to be between 155 and 172 terawatt-hours (TWh) annually.
In conclusion, the recent fire incident in Bandar Puncak Alam has brought to light a sizable illegal Bitcoin mining setup, underscoring a broader pattern of power theft in Malaysia connected to cryptocurrencies. This troubling development not only raises legal and regulatory issues but also sheds light on the environmental implications of the energy-intensive Bitcoin mining process. As investigations progress, the consequences of such unauthorized activities on Malaysia’s energy grid and the broader impacts on the cryptocurrency sector remain crucial matters to monitor.
