Malaysia Electricity Board Lost Over $103 million in losses

In the past few years, several nations have faced a severe electricity crisis due to surging demand for unregistered power, which also means theft and using generated power without consent. Many of them have also reported the growing usage of electricity for cryptocurrency mining activities, especially Bitcoin mining. 

A Malaysian media outlet reported that Tenaga Nasional Berhad, the national electricity provider, has suffered huge losses due to a surge in electricity theft cases. From 2022 to 2023, the company’s total losses were roughly reported to be 103 million ringgit. 

It is worth noting that the losses to the electricity provider have been surging year on year. They were 5.9 million ringgit in 2020 and grew to 141 million ringgit in 2021. In 2022, the total losses from cryptocurrency mining were roughly 125 million ringgit, and in the past year, reported losses were 67.1 million in national currency. 

According to experts, digital asset miners majorly prefer operating in nations that have either a favorable set of rules or fewer electricity charges. Earlier in 2023 a report was published noting that Malaysian authorities have seized unregistered devices used for Bitcoin and the seized are estimated to be valued at over $500k.

In addition, the financial regulators have also seized digital assets holding dozens of miners and some of them were even imposed with severe penalties. Not only Malaysia but several other nations have also reported a surge of illicit or unregistered cryptocurrency mining activities resulting in electricity crisis and severe losses. 

As per available information, mining cryptocurrency is not restricted in Malaysia but there is a set of rules to whom a minor has to comply and register with the authorities to operate the activities.

It is crucial to note that the number of illegal operations in the region is comparatively higher than the operations led by registered miners. Regulators have increased their eye on digital assets miners, due to an increased number of illicit activities resulting in severe power crises all over the country. 

Trading of cryptocurrency in Malaysia is not restricted but there is no official recognition for these currencies from the government or the regulators. 

The Central Bank of Malaysia Act designates the ringgit as Malaysia’s only legal tender. Since Bank Negara Malaysia does not issue any cryptocurrency, it is not recognized as legal tender in the country.

Mining of cryptocurrencies requires massive power consumption and also produces sound above the hearing capacity of humans which could lightly impact the mental health of the residents in the particular area. 

The electricity board of the nation is closely working with enforcement agencies and regulators to tackle the growing trend of unregistered Bitcoin mining activities throughout the country. 

The cryptocurrency Mining industry is valued at over 2 billion US dollars and there are more than 10 companies that are publicly registered for the trading of digital assets. 

In May 2024, Reuters reported a sudden spike in electricity demand in Laos, driven by increased cryptocurrency mining and challenging climatic conditions. Market experts note that crypto miners often prefer countries with low electricity costs and a supportive environment.