According to The Star, illicit crypto mining-related electricity theft has been spreading at an alarming rate, putting a 103 million ringgit dent in TNB’s finances alone this year, reported Suhai Rizain of Malaysia’s Criminal Investigation Department.

Losses from illicit Bitcoin mining have been rising continuously since 2020, which indicates a heavy load on the electrical supplier. The relatively small loss of 5.9 million ringgit that TNB reported in 2020 increased to 140.4 million ringgit in 2021, 124.9 million ringgit in 2022, and an additional 67.1 million ringgit last year. This pattern underscores a persistent and costly issue for the country’s energy infrastructure.

A Costly Strain on Malaysia’s Energy Sector

In a July report, TNB highlighted similar figures, noting a staggering $755 million lost due to illegal Bitcoin mining from 2018 to 2023. While Bitcoin mining represents only a minor share of Malaysia’s total energy consumption, Deputy Minister of Energy Transition and Water Transformation Akmal Nasir pointed out that its financial impact remains significant. He emphasized that the illicit nature of these operations exacerbates costs by exploiting and overburdening the power grid.

Authorities have recently intensified their response, seizing nearly $500,000 worth of electrical equipment associated with illegal mining setups. Additionally, a crackdown on tax evasion in digital assets has been launched to deter further losses. Tax regulations are also tightening with the Malaysian Inland Revenue Board initiating “Ops Token” this year, targeting crypto tax evaders, after discovering significant revenue leakage from unreported trading profits.

The Criminal Investigation Department is committed to investigating the drivers behind these escalating losses, focusing on the sharp increases observed over the past two years. Bitcoin mining without authorization involves siphoning electricity to run high-power computers that process complex algorithms, generating digital assets at the expense of the power grid. This unauthorized usage significantly impacts the country’s resources, as illicit miners don’t pay for the energy they consume.

Malaysia’s Regulatory Framework for Cryptocurrencies

A recent Forbes report examines Malaysia’s regulatory and enforcement approach to cryptocurrencies. While digital assets are not considered legal tender under Malaysia’s Central Bank Act, they are classified as securities under the Capital Markets and Services Order, granting them defined legal status within the financial regulatory framework.

Calls for a progressive approach have emerged within government circles. Notably, in 2022, Communications Deputy Minister Zahidi Zainul Abidin urged the government to recognize Bitcoin and other digital currencies as legal tender, as reported by Bloomberg.

On the religious front, Malaysia’s Shariah Advisory Council recognized digital assets as genuine property, bolstering their legitimacy within Malaysia’s Islamic community, according to research from the Journal of Fatwa and Falak Selangor.

Bank Negara Malaysia (BNM), the country’s central bank, alongside the Securities Commission Malaysia, plays a key role in oversight. Cryptocurrency mining, while legal, faces strict scrutiny due to unauthorized electricity usage.