Posted 8 months ago | by Ben Armstrong
Malaysian Authorities Crack Down on Electricity Scams used for Crypto Mining
Malaysian police have raided two crypto mining facilities that were siphoning up to $600,000 worth of electricity in the span of 3 years from local suppliers.
The law enforcement operation was a joint effort between the Energy Commission and Tenaga Nasional Berhad (TNB) a domestic electricity firm to crack down upon the fraudulent use of energy in the Malaysian crypto industry.
Both locations had up to 148 machines running and have been operating fraudulently for a significant amount of time and at a costly $20,000 in electricity every month.
The regional director of Johor’s energy commission, Nazlin Alim Sadikhi shared:
“The first premises is believed to have been operating for three years while the second premises for two years...We found 100 mining machines in the first premises and another 48 in the second premises.”
Finding Bad Actors in the Crypto Space
The method used to deploy this scam is fairly simple, it involves the fraudster rerouting the electrical wire to use it directly rather than going through an electrical meter and only have to declare seven to $14 per month instead of the monthly $20,000 that they have allegedly munched up.
According to the Electricity Supply Act 1990, Section 37, personnel who engage in the act of defrauding electricity from the public will face a maximum sentence of $1.2 million and/or 10 years in prison.
According to the media, the perpetrator of the above incident will likely face a 10 years jail time or a $240,000 fine if found guilty. Though 10 years in prison may seem justified; but, $240,000 to a crypto miner might just be a drop in the bucket.
No End to Crime In Sight
The recent busts were just a small piece in a much larger puzzle. Earlier last August, the task force was able to bust up to 26 mining facilities that were fraudulently siphoning power, and up to 3,120 mining rigs were confiscated.
“Each of the premises contained over 100 mining machines with a total of 3,120 confiscated by enforcement officers,” said the President of Sepang Municipal Council Mohd Fauzi Mohd Yatim.
There is crime in every industry, and the crypto space in no different. These law enforcement action demonstrate that graft is becoming harder in crypto, and that crimes don't necessarily work out well in the long run.
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