Crypto has exploded in popularity and, while they can be used for peer-to-peer transactions, avoiding traditional banking systems, their applications are far broader.
One of the most prominent - and obvious - uses of crypto is in finance. Decentralized finance (DeFi) platforms allow users to lend, borrow, and trade crypto assets without intermediaries i.e. banks. On top of this, stablecoins (cryptocurrencies pegged to fiat currencies) are proving more and more popular for payments and as a store of value.
Crypto has even found its way into gaming, where it can be used to purchase in-game items, characters, or even entire virtual worlds. The art and collectibles market has also readily adopted crypto, where digital art and collectibles can be tokenized and traded on blockchain platforms.
Crypto casinos have emerged as a popular entertainment option, offering games like slots, poker, and roulette with cryptocurrency as the betting medium. And many of the most trusted Malaysian casinos are in fact, crypto casinos. These platforms often provide anonymity and faster transaction times compared to traditional online casinos.
Due to the popularity of cryptocurrency, criminals have been keen to hop on board the action. Illegal cryptocurrency mining operations have inflicted a staggering financial blow in Malaysia, siphoning off a staggering $723 million worth of electricity since 2018, the country’s Deputy Minister of Energy Transition and Water Transformation revealed.
Akmal Nasrullah Mohd Nasir made the startling announcement during an event where authorities disposed of over 2,000 seized mining machines and related equipment, valued at approximately $467,000. The operation underscores the scale of the illicit activity and the government's determination to crack down on it.
The deputy minister emphasized the detrimental impact of these clandestine operations, not only on the state-owned power utility, Tenaga Nasional Berhad, but also on local communities suffering from power disruptions and increased electricity bills.
Cryptocurrency mining is a computationally intensive process that requires vast amounts of electricity. To avoid detection and hefty energy costs, illegal miners frequently bypass electricity meters or tap into power lines, leading to substantial losses for the power company.
It is understood that the individuals responsible are under the impression that their illegal activities cannot be detected. However, energy supply companies possess sophisticated methods to identify energy consumption within a specific area.
While cryptocurrency mining itself is not prohibited in Malaysia, stealing electricity to power these operations is a serious offense. Authorities have intensified efforts to detect and dismantle illicit mining setups, successfully seizing over 2,000 pieces of equipment in a single operation last October.
To deter future crimes, the seized mining machines were publicly destroyed, serving as a stark warning to potential offenders. The deputy minister stressed that curtailing illegal mining is a top priority for his ministry, alongside the promotion of renewable energy sources.
Malaysia's crackdown on cryptocurrency-related activities extends beyond mining. In May 2023, the Securities Commission Malaysia ordered the closure of the cryptocurrency exchange Huobi Global for operating without the necessary registration. Currently, only six platforms - HATA Digital, Luno, SINEGY, MX Global, Tokenize Technology, and Torum International - are authorized to conduct cryptocurrency trading in the country.