Bitcoin Miners on the Run After Stealing $1.1 Billion in Electricity
Traditionally, thieves usually targeted some form of tangible good — whether it’s physical or digital currency, jewelry, or a car.
But when it comes to mining cryptocurrencies, things get a little stranger. As Bloomberg reports, local law enforcement is hunting down about 14,000 illegal Bitcoin mining operations in Malaysia, which they say have stolen around $1.1 billion in electricity over the last five years.
Police have resorted to using drones and even handheld sensors that can pick up irregular power use to catch them in their act, a bizarre game of cat-and-mouse that highlights how lucrative mining the digital token can be — if the power is on someone else’s dime, at least.
Bitcoin rallied this year, hitting a record high of over $126,000 in October. While the currency has collapsed substantially since then, mining the coin has proven profitable enough over the last couple of years for thousands to risk stealing electricity from the grid for their ill-gotten gains.
Besides causing over a billion dollars in losses for Malaysia’s state-owned energy company Tenaga Nasional, illegal mining operations could wreak havoc on the country’s grid as well.
“The risk of allowing such activities to happen is no longer about stealing,” Malaysia’s deputy minister of energy transition and water transformation, Akmal Nasir, who chairs a special task force specifically set up to crack down on illegal Bitcoin mining, told Bloomberg. “You can actually even break our facilities. It becomes a challenge to our system.”
Rolling power outages in Iran last year, for instance, sparked a heated debate over the role of illegal Bitcoin mining. Kuwait similarly cracked down on crypto mining earlier this year amid a “major” power crisis that has led to blackouts.
Worldwide, Bitcoin mining operations chew through a gargantuan amount of power, consuming more electricity than an entire country each year. The United States has embraced the token wholeheartedly, accounting for over 75 percent of mining activities, according to a recent report by the University of Cambridge.
That’s despite other cryptocurrencies, like Ethereum, implementing alternative ways to validate transactions thatreduce electricity consumption dramatically.
To cash in on the trend, illegal operations are cropping up across Malaysia, turning abandoned malls and industrial spaces into crypto mining sites.
For legal operations, miners have to pay for their power and taxes. But for many, the benefits of running their hardware with stolen power have outweighed the risks of getting caught in Malaysia.
“Even if you run it properly, the challenge is that the market itself is very volatile,” Nasir told Bloomberg. “I don’t see any well-run mining that can be considered as successful legally.”
Akmal likened the illegal operations to being run “by the syndicate,” implying they were operating like organized crime.
“It does have modus operandi,” he said.
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