Illegal crypto mining surges in Malaysia amid unclear policies

Rampant energy theft by amerciable miners, inconsistent policies, and a deficiency of ineligible clarity deter Malaysia from tapping the underlying economical imaginable of cryptocurrency mining, according to an manufacture study released by the Access Blockchain Association of Malaysia.

The study predicts that Malaysia’s crypto mining marketplace volition turn 110.2% successful 2025 — from $2.44 cardinal to $5.13 cardinal — catalyzed by its strategical location, increasing tech ecosystem and expertise successful Shariah-compliant finance. However, the study suggests the state indispensable robust retired respective interior factors to support sustained growth. 

A parallel system of amerciable miners

Malaysian multinational energy company, Tenaga Nasional Berhad (TNB), mislaid 441.6 cardinal Malaysian ringgits ($104.2 million) to energy theft betwixt 2020 and September 2024, which the institution attributed chiefly to amerciable Bitcoin (BTC) mining. Previous losses from 2018 to 2021 reached 2.3 cardinal ringgits ($542 million).

The study highlighted Malaysia’s “latent demand” and the request for a regulated, incentivized situation to pat into the superior mislaid to unlicensed crypto mining:

“Formalizing this (illegal mining) enactment would alteration stolen vigor into morganatic gross for TNB and make taxable income for the government.”

Projected Potential Direct Economic Contributions of Formalized Crypto Mining successful Malaysia (2025). Source: Access Blockchain Association
(Note: Values are illustrative and beryllium heavy connected argumentation implementation, relation assurance and marketplace conditions)

The study added that Malaysia tin physique a accordant multimillion-dollar gross watercourse from crypto mining if it tin onboard a fraction of the amerciable operators to metered connections.

Legal miners run successful the shadows

While the authorities has antecedently assumed ineligible crypto miners were scarce, the study recovered that respective medium- and large-scale ineligible operators already beryllium successful Malaysia. However, they debar publicity owed to concerns implicit cyberattacks, carnal theft and abrupt regulatory shifts.

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Firms similar Hatten Land person begun exploring above-ground mining infrastructure, including partnerships successful Melaka with players specified arsenic Hydra X and Frontier Digital Asset Management. “Companies similar Hatten Land person already signaled partnerships involving thousands of rigs,” the study stated.

Global cryptocurrency mining marketplace size 2023 to 2034 (US dollars, billion). Source: Access Blockchain Association

Due to its beardown net connectivity and abundant hydropower, Malaysia is well-positioned to pat into the astir $3 cardinal crypto mining market. However, the Securities Commission, which presently regulates crypto exchanges, has nary circumstantial model for mining.

According to the report, Malaysia ranks 7th to 8th globally by hashrate, contributing astir 2.5% to 3% of Bitcoin mining. 

Policy recommendations see creating a mining-specific license, introducing greenish tariff initiatives, closing ineligible loopholes successful energy theft and processing Shariah-compliant mining models.

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