Malaysian major electric utility Tenaga Nasional Bhd (TNB) fell victim to an illegal cryptocurrency mining operation, which resulted in a $760,736 loss, local media organization Malay Mail reported on Aug. 7. After revealing the malpractice, the company raided 33 premises located near the state capital of Pahang, Kuantan.
Authorities raided Bitcoin mining operations in Malaysia after finding that they were stealing electricity resulting in a loss of 3.2 million Malaysian ringgit ($760,736) to the utility company.
The mining equipment deployed electric power directly from the distribution board passing the meter.
“The metered 3 Amp was used only for one lamp and a suction fan. They paid a bill of only 219 Malaysian ringgit ($52) whereas they should have been billed 108,000 Malaysian ringgit ($25,674) a month for the unmetered 1,500 Amp”, Mohd explained.
33 facilities illegally mining Bitcoin
Distributing network general manager Siti Sarah Johana Mohd said that the facilities had been mining Bitcoin for six months:
“TNB collected evidence that 23 premises were running Bitcoin mining activities while the other 10 premises were aware of our raid this time around and destroyed the evidence.”
The government’s positive outlook
While digital currency exchanges and blockchain-based companies in Malaysia previously faced some testing times following regulatory changes in the country, the Malaysian government expressed positive sentiments toward cryptocurrencies and blockchain technology, even though they have classified all cryptocurrencies as securities.
According to Finance Minister Lim Guan Eng, the Malaysian government sees the potential of cryptocurrencies and blockchain to improve a number of sectors of its economy:
“The Ministry of Finance views digital assets, as well as its underlying blockchain technologies, as having the potential to bring about innovation in both old and new industries. In particular, we believe digital assets have a role to play as an alternative fundraising avenue for entrepreneurs and new businesses, and an alternate asset class for investors.”
Meanwhile, Malaysia allows Bitcoin mining and trading with no restrictions. However, the Central Bank of Malaysia issued a statement that Bitcoin is not considered to be legal tender and its users are poorly protected from fraudulent schemes and operational risks.
Malaysia’s Electric Utility Says Bitcoin Miners Stole $25M in Power
Malaysian power utility firm Tenaga Nasional Bhd (TNB) is tightening measures in a bid to stem the millions lost to electricity theft by Bitcoin miners.
According to an Aug. 15 report from EdgeProp, tampered electricity distribution boards used in local Bitcoin mining operations have cost TNB RM106 million ($25.3 million) as of June 2019.
There have been 437 cases of mining-related power theft in Peninsular Malaysia over this time period, 370 of which were recorded in the state of Selangor.
Up to 3 years imprisonment
TNB is the sole electricity utility firm in Peninsular Malaysia and also the largest publicly-listed power company in Southeast Asia, with RM99.03 billion ($23.6 billion) in assets.
According to TNB metering, distributing network general manager Siti Sarah Johana Mohd Said, the firm will take legal action against account holders – which affects premise owners even in cases where the theft has been perpetrated by their tenants:
“A letter of demand will be issued to the owner of the premises account after we disconnected the electricity supply.”
Under Section 37 of Malaysia’s Electricity Supply Act, those charged with power theft face a maximum penalty of RM100,000 ($24,000) or three years imprisonment.
The firm is limited in its actions to being allowed to disconnect power supply for a maximum of three months; it can, however, file claims for payments owed dating back as far as five years.
In a bid to protect premise owners, TNB has recommended they temporarily transfer their TNB to their tenants’ name.
Recent raids on power thieves
As reported earlier this month, Malaysian authorities raided 33 premises related to Bitcoin mining after detecting they were stealing power at a cost to the firm of RM3.2 million ($761,000).
While Malaysia permits Bitcoin mining and trading with no restrictions, the country’s central bank has issued a statement that Bitcoin is not considered to be legal tender and that users are poorly protected from fraudulent schemes and operational risks.
This summer, reports emerged that police in China had reportedly gathered evidence of people laying cables via fish ponds to steal oil well power to fuel their bitcoin mining.
In February, a group of suspects were arrested in the German city of Klingenthal, Saxony, after being accused of stealing over $3 million worth of electricity to operate a cryptocurrency mining farm.