Malaysian authorities’ report two separate raids overnight on cryptocurrency mining operations in Southern Johor after investigations discovered an electricity theft plot totalling $600,000.
In a collaborative investigation by the Energy Commission (ST), Tenaga Nasional Berhad (TNB), City Council and Inland Revenue Board, raids uncovered two Bitcoin mining facilities illegally extracting electricity from the cities power-grid to fuel their potentially lucrative operation.
Over their life-span these operations built themselves up to a mid-level mining status with 100 and 48 active machines respectively. This news comes alongside the remarkable discovery that the facilities only paid a minuscule RM45 per month ($10 USD) for their genuine electricity bills.
Johor ST regional director Nazlin Alim Sadikhi reported that the TNB lose an estimated RM80,000 per month (roughly $19,300 USD) in electricity theft because of similar crypto-based mining schemes in the state.
She added that “we found that illegal wiring was installed so that electricity was supplied directly and not through the meter. The first premise is believed to have been operating for three years while the second premises for two years.”
Cryptocurrency mining is well-known for its high start-up costs. So-called ‘mining farms’ have cropped up across the world in large-scale warehouses to house the hundreds, often thousands of algorithmic machines needed to sustain profit in this niche industry.
However, as the supply of Bitcoin has increased over the years, the reward for miners has naturally decreased. The most recent halving of the leading cryptocurrency – the 3rd in its history – saw a planned reduction of the block reward by 50% from 12.5BTC to 6.25BTC.
As a consequence, the entry-fees for such operations have exponentially increased which means that premises require more machines and a higher electricity volume to achieve the same monetary reward. Hence the $600,000 bill in this story.
The Malaysian Energy Commission have now launched a full investigation into yesterday’s events, citing Section 37 of the Electricity Supply Act 1990.
A total of 288 cryptocurrency mining premises have been raided in Johor since 2018 according to TNB team engineer Mohd Satari Mohamad. Governments and specialist organisations worldwide are becoming more astute in their approach, abling them to act swifter in their investigations into this futuristic method of theft.
If the court verdict considers the culprits of the two Bitcoin operations guilty, they could face fines of MYR 1 million ($240,000 USD), 10 years in prison, or potentially both.