Malaysian Authorities Apprehend Seven People for Electricity Theft Linked to Bitcoin Mining

Malaysian authorities have apprehended seven individuals linked to a power theft operation associated with illegal Bitcoin mining activities.

Local news reports reveal that three Malaysian citizens and four foreign nationals were arrested last week. According to the authorities, these individuals were all stealing electricity to fuel their cryptocurrency mining ventures.

Bitcoin Mining Arrest in Malaysia

Data from Bernama, one of Malaysia's news agencies, revealed that arrests were possible through the local police department's combined efforts.

ACP Wan Kamarul Azran Wan Yusof, Sepang District Police Chief, pointed out that the arrests are part of a broader strategy to combat electricity theft. This crime has become closely associated with the rise of illegal bitcoin mining in the region.

The chief also emphasized that the detained individuals have no crime records. This shows how well they have concealed their operations from law enforcement.

During the raids, law enforcement officers confiscated 52 Bitcoin mining rigs alongside various electronic devices valued at approximately RM250,000 (about $57,000).

Meanwhile, the crackdown aligns with ongoing efforts by Malaysian authorities to address the issue of power theft within the country's energy sector, particularly by crypto miners.

Last month, Akmal Nasrullah Mohd Nasir, Malaysia's deputy energy transition and water transformation minister, revealed a shocking detail between 2018 and 2023. According to Mohd Nasir, crypto miners in the country illicitly consumed an estimated RM3.4 billion ($777 million) worth of electricity from 2018 to 2023.

Notably, the interest of Southeast Asian countries, including Malaysia, in digital asset miners has surged following China's 2021 ban on all crypto mining activities.

These nations offer skilled labor, competitive electricity prices, and existing infrastructure, making them favorable destinations for miners seeking to establish or expand their operations.

However, the illegal nature of some of these operations poses severe challenges to local authorities. As a result, law enforcement has intensified efforts to restrict such activities and mitigate their impact on the national power supply.

Crypto Tax Crackdown in Malaysia

Notably, Malaysia classifies crypto assets as securities, allowing trade within the country, even though the assets are not recognized as legal tender. As such, there are tax laws that businesses involved in the crypto industry must adhere to.

This regulatory approach aligns with the nation's growing crypto market, which they expect will generate $306.6 million in revenue by the close of 2024.

Meanwhile, the Malaysian government is increasing efforts to tackle tax evasion across all industries. In the first few months of 2024, Prime Minister Datuk Seri Anwar Ibrahim ordered a crackdown after the country reportedly lost RM 6.34 billion due to unpaid taxes.

In June this year, a local news outlet reported that the CyberSecurity Malaysia (CSM) and Royal Malaysia Police cracked down on 10 locations within Klang Valley. According to the report, the raided companies failed to properly report their crypto trading activity to the country's Inland Revenue Board (IRB).

Malaysian crypto businesses are now under increased scrutiny, with ongoing audits to identify tax defaults. Companies guilty of evading taxes could face penalties of up to RM 20,000 and potential imprisonment for up to six months.

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