More than US$100 million in losses incurred by Malaysia over the past five years due to power theft by illegal cryptocurrency mining operations may point to a bigger problem of illicit funds moving unhindered in cyberspace, a data protection expert has warned.
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Authorities have cracked down on more than 9,000 illegal mining operations across the peninsula between 2020 and 2024, with some consuming more than 1 million ringgit worth of power every month to run equipment to cool mining rigs, which function to solve digital puzzles to harvest bitcoin and run 24 hours a day.
Tenaga Nasional Berhad (TNB) on Monday revealed that illegal cryptocurrency mining had caused a 300 per cent spike in power theft over the past five years, with such operations found in urban centres like Johor Bahru and rural towns further north in Terengganu.
These had caused over 500 million ringgit (US$116 million) in losses, the national electricity grid operator said.
The issue, however, stemmed from a lack of clear regulations to tackle the underlying reasons behind illicit cryptocurrency mining, said Benjamin Sheperdson, a data protection expert.
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“When you talk why [cryptocurrency mining] is done illegally, it is because of money laundering or perhaps fraudulently declaring income,” said Sheperdson, a non-executive director at data protection advisory Straits Interactive.